Union finance minister, P Chidambaram asked industry to cut prices to increase demand and economic growth of the country. He was addressing the India Economic Summit, organized by the World Economic Forum and CII in the capital.

Mr. Chidambaram appealed Hotels, Real estate companies and Auto makers to revise prices to combat demand slowdown. He termed price cut as a best method instead of increasing inventory. He promised to provide sufficient liquidity to service sector to ensure its growth.

FM further expressed his view that the ongoing financial crisis has impacted exports, capital inflows and external credit but situation would come under control very soon. Chidambaram expected growth rate in between 7-7.5 per cent for the current fiscal and increase in future due to measures taken by the government.

Meanwhile, industry strongly opposed the idea of price cut and said that there is no scope to cut prices at this point of time. Bajaj Auto Ltd chairman, Rahul Bajaj said that two wheeler industries has a margin of about 4-5% and expressed doubt that the price cut would help to increase demand. However, Godrej group chairman Adi Godrej supported the idea and said that price cut is a better option to stimulate demand and increase sale.