PM to discuss confidence-building steps with industry captains

New Delhi, Nov 2 (PTI) As part efforts to shore up
confidence eroded by the global financial rout, Prime Minister
Manmohan Singh will on Monday meet here leaders of India Inc,
which may seek more measures to tide over the liquidity
crunch.

Ratan Tata, Anand Mahindra, Mukesh Ambani, Anil Ambani,
K.P. Singh, Sunil Bharti Mittal and Deepak Parikh are among
those expected to attend the meeting -- two days after Reserve
Bank of India (R.B.I.) decided to inject another Rs 85,000
crore into the financial system by revising downward
short-term lending rate and key deposit requirements for
banks.

Presidents of the three apex chambers -- Assocham, C.I.I.
and F.I.C.C.I. -- Sajjan Jindal, K.V. Kamath and Rajeev
Chandrasekhar will also participate in the deliberations.

With the R.B.I. providing Rs 2,65,000 crore in the last
one month, one of the industry's main demands has largely been
met. However, industry sources feel more was required since
the overnight inter-bank lending rates are still quite high.

The R.B.I. move to pump in money into the economy is in
line with several central banks across the world providing
more money to their cash-starved financial institutions.

While the government has given assurances on the safety
of Indian banks, high interest rates ranging between 14-17
percent have particularly impacted sectors like real estate
and automobile. The aviation industry, which was provided a
much needed help in the form of cut in jet fuel prices, is
reeling under high cost of operations.

Business leaders are concerned over the plunge in
industrial growth to 1.3 percent in August from a high of
10.9 percent in the same month a year ago, mainly on account
of poor performance by the manufacturing sector which expanded
by a mere 1.1 percent.

For the five month period (April-August 2008-09), the
industrial production growth rate stood at 4.9 percent, down
from 10 percent during the corresponding period last year.

C.I.I. will seek setting up of a special purpose fund
from foreign exchange reserves for meeting the foreign
currency requirements of Indian banks.

The chamber is also seeking a guarantee from the
government for bank deposits and a special corpus fund for
small and medium enterprises.

F.I.C.C.I. will ask for a review of F.D.I. caps in
telecom, multi-brand retail and aviation. It is also seeking
raising long-term money with an N.R.I.-bond issue.