Repo rate hikes hitting industry bottom line, reliefs needed: Karnataka's industry body

New Delhi: The Reserve Bank of India (RBI)'s latest repo rate hike of 35 bps, following four previous hikes of 40 bps in May and three successive hikes of 50 bps from June to October, is understandably due to the need to tame rising inflation, but the fact is it is hurting the industry, services and trade who operate on very thin margins, observed FKCCI, and appealed to the government to take note of the flip side and suggested alternate incentives may be given to help them tide over the overall 225 bps hike in fiscal 2022-23 (FY23).
"There are no two views that taming inflation is critical," said BV Gopal Reddy, president, Federation of Karnataka Chambers of Commerce and Industry (FKCCI). "But at the same time, the measures that are contemplated should not adversely affect businesses. Otherwise, it will have the result of dampening growth and the government will have another major problem of tackling de-growth in the economy." "At a time when businesses are coming out of the pandemic and battling with global and national challenges such as supply side disruption, recession in the international market, raw material shortage, and shoring up national GDP, the policymakers must ensure that businesses are not overburdened and structure policies that create a conducive environment for business," he suggested and hoped that the government will take note and come up with a solution for this.
The Federation of Karnataka Chambers of Commerce and Industry was founded by M Visvesvaraya in 1916 as the Mysore Chamber of Commerce, with WC Rose serving as the Chamber's first President. It stands as one of the five foremost chambers in the country and is the oldest parent chamber of any state in India. the membership at FKCCI stands at 3,000 direct members and more than 250,000 indirect members from all sectors, spread across Karnataka. (ANI)