New Delhi, Feb 8 (FN Agency) Federation of Indian Chambers of Commerce and Industry (FICCI) on Wednesday welcomed the decision of the Reserve Bank of India (RBI) to increase repo rate by 25 bps and said the hike was in line with the expectations. In a statement, Subhrakant Panda, President, FICCI said, “The 25 bps hike in policy repo rate by the Reserve Bank is in line with expectations.
While the inflation trajectory over the course of next year is expected to be below 6 per cent and will be somewhat of a reprieve, there is an upside risk on account of geopolitical factors. Hence, the Central Bank is expected to remain cautious while focussing on the economy achieving its full potential.” “Growth estimates for the first half of 2023-24 have been revised upwards noticeably, and we believe the Union Budget presented last week will provide a fillip. While we are encouraged by the economic prospects, according primacy to growth was essential given the uncertain environment globally. The historic outlay on capital expenditure, amounting to 3.3 per cent of GDP, is well placed and will set in motion a virtuous cycle by also crowding in private investments. The Indian economy is inherently resilient and has the wherewithal to overcome short term turbulence in its pursuit of inclusive and sustainable growth,” Panda added. “We also welcome the guidelines for Regulated Entities on the broad framework for acceptance of green deposits and the disclosure framework on Climate-related Financial Risks.
Further, the announcements pertaining to enhancing the scope of TReDS by providing insurance facility for invoice financing, permitting all entities/institutions undertaking factoring business to participate as financiers in TReDS, and permitting rediscounting of invoices. Taken together, it should certainly enable better cash flows for MSMEs,” he added. The Central bank on Wednesday hiked the key benchmark policy rate by 25 basis points to 6.5 per cent, citing sticky core inflation.