New Delhi, Feb 04, 2015: “ RBI, in its today’s review has played very cautiously by just cutting SLR by 50 bps and not touching key rates. The apex bank was under pressure to release some fund in the market to boost purchase. By cutting SLR, it has subtly allowed banks to lend more without impacting inflation. We must understand that our manufacturing sector, including real estate, is facing a paradoxical situation. On one hand it has a surplus inventory produced at a higher input cost in last 6 to 8 quarters. On the other, buyers today do not enjoy much purchasing power due to high interest rates. This has created a gap in the demand and supply in the market. As manufacturers and developers do not have scope to lower product cost, the only way to mend this gap is by allowing more purchasing power to the buyers.
Though we welcome this dovish movement, we expect RBI would relax its monetary policies in near future and would boost sales in the market. We also hope that government would announce some reformatory measures in terms of tax in the upcoming Union Budget to give some breather to manufacturers and developers so that they may also slash cost of their products .”
