Liberal monetary stance needed: Sharma to Pranab

The RBI,in its review on June 18,kept the interest rates unchanged against them market expectations of a rate cut arguing that the cut may exacerbate the inflationary pressures rather than supporting growth.

Emphasising that there is a strong case for RBI revisiting its decision in favour of downward revision of policy rates, Sharma said that for the growth of the manufacturing sector,there is a pertinent need for a liberal and supportive monetary regime.

Sharma said that the current measures would further dampen the investment in the country as this comes at a time when the manufacturing sector growth has already moved into a negative territory.

The commerce minister said the frequent increase in the interest rates during 2010 and 2011 did not have a desired moderating impact on the headline inflation,which remained above 7 per cent in the last few months.