New Delhi, April 2 As the Reserve Bank of India (RBI) prepares for its upcoming monetary policy meeting from April 7 to 9, the Associated Chambers of Commerce and Industry of India (ASSOCHAM) on Wednesday called for a cautious approach, recommending that the RBI adopt a "wait and watch" stance rather than opting for an immediate rate cut.
ASSOCHAM President Sanjay Nayar emphasised that while the central bank had already injected liquidity into the market through measures like a 25-basis-point rate cut during the last policy cycle, it is important to allow time for these measures to take effect.
"The RBI has recently injected liquidity into the market through various measures, including a 25 basis points cut last time," he said.
Nayar contended that the focus should be on assessing the impact of these steps on capital expenditure (capex) growth and consumer consumption before making any further decisions.
"Given this backdrop, we believe that the RBI is expected to hold rates steady during this policy cycle. A rate cut at this stage may only lead to pressure on the rupee, though it may increase consumer borrowing," he stated.
Nayar pointed out that while external challenges persist, India’s economy remains strong and is expected to grow at a steady pace in the new fiscal year.
The leading industry chamber’s outlook for India’s GDP growth is optimistic, with expectations for a growth rate of around 6.7 per cent for FY’26.
The industry body also forecast that retail inflation will remain under control, thanks to the favourable movement in global crude prices and the easing of geopolitical tensions.
"The RBI's previous actions, such as the liquidity measures and rate cuts, had been aimed at boosting demand across various sectors of the economy," Nayar added.
While such steps can help sectors like housing, automobile, and consumer durables, he advised that the central bank carefully monitor the broader economic environment before making further cuts.
Despite the pressures on the global front, including fluctuating crude oil prices and geopolitical uncertainties, ASSOCHAM remained confident in India’s resilience.
The firm believed that the right balance of fiscal and monetary policies would help maintain stability and foster growth in the coming months.
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