NEW DELHI: Indian corporate leaders have urged Prime Minister Narendra Modi to take steps to further reduce the cost of capital to help boost manufacturing in the country and generate consumer demand.The request — made at Indian industry associations’ first interaction with the prime minister after the new government came to power in May last year on Tuesday — reflects the industry’s disappointment with meagre rate reductions announced by banks after the Reserve Bank of India cut policy rates for the third time in six months in June.Top industry sources told ET that the corporate leaders were unanimous that the government should take steps that would enhance consumer demand, which in turn would improve capacity utilisation across sectors and boost manufacturing.“Industries across sectors are yet to reach the level of optimal capacity utilisation, indicating that the consumer demand continues to be weak,” a person who attended one of the meetings said.“Hence, we have urged the PM to look into ways of bringing down the cost of capital further to help industry enhance investment while giving a push to consumer demand.” The RBI has reduced key interest rates by 75 basis points since January, but banks have passed on less than half of that to borrowers. The person said Modi listened to all their suggestions.The prime minister on Tuesday had separate interactions with delegations of the Confederation of Indian Industries (CII) and the Federation of Indian Chambers of Commerce and Industry ( Ficci ) delegations, each lasting about an hour.The meetings were attended by 15 CII representatives and 11 Ficci representatives, including Jyotsna Suri, Naina Lal Kidwai, Rajan Bharti Mittal and Pankaj Patel from Ficci and Sumit Majumdar, Vinayak Chatterjee, Pawan Goenka, Naushad Forbes, Sanjay Reddy and Baba Kalyani from CII. Despite the plentiful rain in June, the weather office has forecast monsoon rains to be 8% and 10% deficient in July and August, respectively, triggering fear among industry that this could further pull down consumer demand and impact their capacity to invest.The industry biggies have also urged Modi to provide additional support to export-oriented sectors so that they can scale up production in a competitive manner to cater to overseas markets.They pointed out that high cost of credit has affected the working capital and margins of Indian exporters who are already facing the heat of weak demand in key economies and slow global economic recovery.Appreciation of the rupee against other currencies has also dented competitiveness of Indian exports. Exports declined by 20.19% in May at $22.3 billion, with key sectors including gems and jewellery, engineering, leather and petroleum all sliding.Modi highlighted three sectors that contribute the most to India's import bill – oil and petroleum, electronic goods and defence – and said that in each of these sectors, there is immense potential for Indian industry to innovate and ‘Make in India’.“He spoke of the attention that he has been giving to speeding up projects in various ways, including his monthly PRAGATI interaction with various ministries of the union government, as well as chief secretaries of states,” a statement issued by prime minister’s office said. Both CII and Ficci praised government initiatives such as Ease of Doing Business, Make in India, Smart City Mission, Housing for All, Swachh Bharat Abhiyan, Clean Energy Mission, and Jan Dhan Yojana , the statement said.Sources said the meetings focused on key issues impacting industrial growth in the country, including the need for aggressive focus on the MSME sector that is an important driver for the success of the Make in India initiative.