Interviews
RBI to increase surveillance of entire financial system, ASSOCHAM
02 May '08
4 min read
The RBI should relax the norms relating to the market intermediaries to avoid the liquidity crunch. In addition, the bank should be prepared for the withdrawal of liquidity from Indian economy as the conditions of recession in world economy have become ripped.
The ASSOCHAM also holds that India as compared to other countries has advantageous position as a large part of its food consumption is met by domestic production. The only exception is edible oil in which the country is dependent on imports.
Rise in the prices of pulses is a disturbing trend as they are unique to the food basket and the time source of proteins and are not grown in larger quantities anywhere else. Hence, greater investments and technological inputs need to be diverted in production of pulses.
Research and development, especially catering to the needs of Indian food basket should be promoted. Appropriate policy measures need to be taken to reduce the inefficiencies in the supply chain system which contributes in the rising prices.
Government should promote organized retail, at least at the domestic level and adequate credit support should be given to sectors like food processing, logistics, transport, cold storage and warehousing. The ECB shall be further raised in case of food processing companies to reduce their effective borrowing cost.
While it is essential to maintain inflation under the tolerance level, government should also ensure that the benefit of higher prices for the agriculture commodities should reach farmers, which in turn would lead to more consumption in rural areas.
The Chamber has also highlighted the need for increasing surveillance in the entire financial system, stressing that RBI needs to become more pro-active on this front as crisis situation is taken on adequately due to global turbulence. As a result of this, the risk factor in the Indian market has already shaken the investors.
The ASSOCHAM also holds that India as compared to other countries has advantageous position as a large part of its food consumption is met by domestic production. The only exception is edible oil in which the country is dependent on imports.
Rise in the prices of pulses is a disturbing trend as they are unique to the food basket and the time source of proteins and are not grown in larger quantities anywhere else. Hence, greater investments and technological inputs need to be diverted in production of pulses.
Research and development, especially catering to the needs of Indian food basket should be promoted. Appropriate policy measures need to be taken to reduce the inefficiencies in the supply chain system which contributes in the rising prices.
Government should promote organized retail, at least at the domestic level and adequate credit support should be given to sectors like food processing, logistics, transport, cold storage and warehousing. The ECB shall be further raised in case of food processing companies to reduce their effective borrowing cost.
While it is essential to maintain inflation under the tolerance level, government should also ensure that the benefit of higher prices for the agriculture commodities should reach farmers, which in turn would lead to more consumption in rural areas.
The Chamber has also highlighted the need for increasing surveillance in the entire financial system, stressing that RBI needs to become more pro-active on this front as crisis situation is taken on adequately due to global turbulence. As a result of this, the risk factor in the Indian market has already shaken the investors.
Associated Chambers of Commerce and Industry of India
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