Economy will boost up in the third quarter
By siliconindia   |   Thursday, 25 June 2009, 01:52 IST   |    1 Comments
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Economy will boost up in the third quarter
Bangalore: At the fourth Emerging Markets Forum, Planning Commission Deputy Chairman Montek Singh Ahluwalia says that the Indian economy would surely kick start in the third quarter of the calendar year. The key decision makers in the forum expressed their views on the Indian economy. Amidst the host of eager participants from over the globe and India as well, the HDFC Bank Chairman Deepak Parekh says that the Indian banking system is flushed with funds and the commercial banks are investing these with The Reserve Bank of India (RBI). "The demand for credit is not rising in line with the liquidity. As a result, I think the lending rates are likely to go down further. I expect the rates to go down by at least 50 basis points over next six months," said Parekh. Parekh also mentioned about the housing sector that the demand for affordable housing (up to Rs 30 lakh per unit) is on constant rise in the country. He added, "HDFC's loan disbursements in this segment are improving on month-over-month basis in current year." India's commercial banks posted 7.5 percent growth in home loans in the first 11 months of fiscal 2009, according to the data released by RBI. However, Rajya Sabha member and former RBI Governor Bimal Jalan mentioned his concerns Bimal Jalan mentioned his concerns about the about the spread between the actual lending rates and the repo rate."This is something the RBI will have to look at keenly," he told the Financial Express reporters. The current repo rate is around 5.5 percent and the banks are lending at 11 percent rates. "A huge gap of around 600 basis points," asserted Jalan. Speaking about the debate and discussions in the event, Pratip Kar, a Senior Official at the World Bank and former SEBI Executive Director said,"Foreigners in this forum would get to know about the seriousness and the direction of government reforms in the days to come. That would attract a lot of foreign funds in the country."

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