Industry biggies urge PM Modi to cut capital cost to boost manufacturing

Corporate leaders have requested Indian Prime Minister Narendra Modi to take steps to lower down capital cost to boost manufacturing and enhance consumer demand.

The corporate leaders met Modi during the first interaction.

Top industry sources told Economic Times that the leaders jointly urged the Indian Government to take steps to enhance consumer demand, which will improve capacity utilisation across sectors and boost manufacturing.

"Industries across sectors are yet to reach the level of optimal capacity utilisation, indicating that the consumer demand continues to be weak," a person who attended one of the meetings told the financial daily.

The demand showed how the industry was disappointed due to meagre rate cuts by the Reserve Bank of India (RBI).

Although the RBI has reduced key interest rates by 75 basis points, the banks have passed on less than half of that to borrowers.

Modi met delegations of the Confederation of Indian Industries (CII) and the Federation of Indian Chambers of Commerce and Industry (FICCI), separately, each lasting about an hour.

The leaders have also sought for additional support to export-oriented sectors so as to scale up production in a competitive manner to cater to overseas markets.

Meanwhile, Modi said three sectors contributed the most to India's import bill - oil and petroleum, electronic goods and defence. He added that sectors had immense potential to innovate and 'Make in India'.

"He spoke of the attention that he has been giving to speeding up projects in various ways, including his monthly PRAGATI interaction with various ministries of the union government, as well as chief secretaries of states," a statement issued by prime minister's office said.

(Image: Reuters)