India stands out as fastest growing economy, but RBI should halt any more rate hike: Ajay Singh


NEW DELHI : With the Reserve Bank of India (RBI) Monetary Policy Committee (MPC) set to review the benchmark policy rates, Assocham President Ajay Singh on Tuesday urged the central bank’s Monetary Policy Committee for a halt to any more hike in the lending rates in the wake of uncertainties in the global business environment. 

Addressing his maiden press conference after taking over as the Assocham President, Singh dealt with several key issues confronting the Indian industry, including the overall economic outlook, inflationary pressures and several unfolding opportunities for the young entrepreneurs as the country leverages the technology-led economic expansion with large job potential. 

He said, though India remains the fastest growing nation amongst the major economies, the growth is uneven even as the global headwinds from volatile energy prices, geo-political developments and threat of recession in major economies need to be watched with abundant caution. 

“There are suggestions in some quarters about another 25 bps increase in the REPO rate by the RBI Monetary Policy Committee, we feel the economy has reached a saturation point beyond which it may be difficult to absorb any more rate hike. Rate sensitive sectors like real estate including residential complexes, passenger cars, commercial vehicles may see negative impact of the rate hike,“ Singh said.

Talking about the MSMEs, he further said most of them are in the services sector, notably trade , street vendors, restaurant owners, small transport operators and job contractors or medium sized companies. 

“While the FinTech’s are fast reaching out to them, they need to be supported in terms of accessing their high-end tech platforms like AI both for working capital as also marketing support. The MSMEs can thus access and leverage AI based platforms for promoting their businesses. This would also lead to further formalisation of the economy,” Singh added.

Ajay Singh said that like in the case of MSMEs, technologies like AI should be leveraged for food management, both production and supply. Technology platforms should link farmers, FMCG companies, small distribution channels, state governments and the central ministries of food and consumer affairs, earth science, agriculture and farmers welfare and rural development as chemicals. 

“By sheer nature, agriculture is highly vulnerable to climate; excessive or deficit rains, extra temperature or cold weather can affect the production. We often run into either the ‘problem of plenty’ or ‘problem of shortages’, helping no one in the value chain. The technology interface should help resolve several such problems,” he added.

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Updated: 04 Apr 2023, 07:15 PM IST

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