Welcoming the Reserve Bank of India's monetary policy, the industry chambers on Tuesday said the central bank's 6.5-7 per cent growth projection for this year was in line with their expectations.

The Confederation of Indian Industry President Anand Mahindra said while economic growth is expected to be buoyant in 2004-05, "there could be concerns on inflation due to rising oil prices as well as excessive domestic liquidity."

RBI pegged growth to be at 6.5-7.0 per cent and inflation to be around 5 per cent this year in its lean season credit policy.

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The Federation of Indian Chambers of Commerce and Industry President Y K Modi said efforts would have to be made to enhance the growth to 8 per cent.

The Associated Chambers of Commerce and Industry President Mahendra Sanghi said RBI's efforts for easy credit flow to agriculture and small and medium manufacturing units would "go a long way in sustaining the country's economic growth and ensure more equitable distribution of the gains."

However, on the prime lending rates, which according to RBI was expected to fall by 0.25-2.0 per cent, FICCI was of the view that there was scope for further reduction.

"Reduction in the bench-mark PLR by about 50 to 200 points is a right step. This initiative should be strengthened so that the BPLR falls further," Modi said.

The exporters' representative body Federation of Indian Exports Organisation President Rafeeque Ahmed held that the non-reduction in the interest rate for export credit in rupee had disappointed it.

CII said the move to maintain the current interest rate environment was wise and pointed out that the price situation is unlikely to cause concern to macroeconomic stability.

The alignment of repayment dates for agricultural loans to harvesting dates is innovative and could help reduce NPAs in this sector, Mahindra said.

FICCI pressed for defining and properly implementing the band over and above BPLR saying it would strengthen a proper credit recording system for appropriate pricing of loans to small scale sector.

Modi hoped expansion of definition of infrastructure lending will improve flow of funds to agriculture and said the roadmap to BASEL II be based on consultative process.

Assocham expressed concern that the permission to raise loans under automatic route for investment in infrastructure and real estate sector has not been extended to non-banking financial institutions.

FIEO president welcomed the gold card scheme for exporters but urged RBI to work out details of benefits instead of leaving it to the individual banks.

Ahmed also sought a time limit for issuance of gold card by the banks and asked RBI to monitor it.