RBI’s 25 bps rate hike necessary to contain inflation, textiles need support: Saurabh Sanyal
ASSOCHAM's Saurabh Sanyal welcomes the RBI's 25 bps repo rate hike to control inflation while calling for urgent support for the textile sector.
ASSOCHAM Secretary General Saurabh Sanyal has welcomed the Reserve Bank of India's decision to increase the repo rate, stating that the move is essential to curb rising inflation. While the rate hike aims to manage price pressures, Sanyal noted that the country's economic growth remains resilient across most major sectors.
A Strategic Move to Tackle Inflation
The RBI's Monetary Policy Committee recently raised the policy repo rate by 25 basis points to 5.50 per cent. This decision comes in response to mounting inflation risks, even as the central bank maintains a positive outlook for domestic economic expansion. Speaking to ANI, Sanyal described the move as a "very good move" by the RBI Governor.
"The 25-basis-point increase is not a very large hike. It has been done to control the inflationary trend," Sanyal remarked. He emphasized that the adjustment is designed to tackle rising price pressures without causing significant disruption to the nation's growth momentum.
Economic Growth and Sectoral Performance
India's economic trajectory remains strong, with the economy growing by 7.8 per cent during the April-June quarter. Reflecting this optimism, the RBI has also raised its growth forecast for 2026-27 to 7.1 per cent, up from the previous estimate of 6.7 per cent.
Sanyal highlighted several high-performing sectors, including:
- Automobiles: Currently performing exceptionally well.
- Electronics and Telecommunications: Showing strong growth trends.
- Manufacturing and Services: Maintaining a robust presence.
- Medical and Pharmaceuticals: Contributing positively to the economy.
Textile Sector Calls for Urgent Policy Support
Despite the overall economic strength, Sanyal raised concerns regarding the textile industry. As one of India's second-largest employment-generating sectors, the industry has recently faced a slowdown. Sanyal urged the government to provide targeted policy support to revitalize this crucial segment.
"There has been some slowdown in textiles. Since textiles are the second-largest employment-generating sector, there are some weaknesses there. The sector needs government support to give it a push," Sanyal stated, noting that industry efforts are already underway in this direction.
Agriculture and Future Outlook
While the manufacturing and services sectors remain on a high note, Sanyal cautioned that the agricultural sector might face challenges in the upcoming quarter. He suggested that rainfall conditions could lead to a "slight setback" for the farming sector.
In a separate observation, Sanyal congratulated Prime Minister Narendra Modi on completing 25 years since taking office as the Chief Minister of Gujarat. He praised the Prime Minister's focus on driving development, fostering innovation, and supporting startups and Small and Medium Enterprises (SMEs) across the nation.