New Delhi, June 3 : Reacting to the first bimonthly monetary policy announced by RBI today, Chandrajit Banerjee, Director General, CII welcomed the Central Bank’s decision to reduce SLR by 50 basis points stating that the policy announcement has shifted the spotlight back on growth while restraining inflationary pressures in the economy.

“The announcement heralds a new beginning in which both the RBI and the government would work in concert to push the growth agenda forward. Industry believes that the reduction in the SLR is a clear message from the RBI that growth is a priority with RBI and would help availability of capital,” he said.

“Admittedly, CII recognizes that concerns about inflation has restrained RBI from reducing key policy rates but by easing liquidity in the system by lowering SLR it has ensured that funds would be available to the banking sector for onward lending which in turn would push investment and growth,” he added.

He said: Going forward, CII advocates urgent supply side responses which would improve the productivity of agriculture and reduce the supply side bottlenecks in production and distribution. This would entail timely intervention to release excess food stocks in the market, permit key food imports, dismantle the system of administered prices, delisting perishables from APMC Act and creation of a Common Market for agricultural produce which would contain inflation within the comfort zone of the RBI and help reduce policy rates.