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India Inc against interest rate hike
Monday, 02 October 2006, 19:30 IST
NEW DELHI: India Inc is against any interest rate hike in the mid-term review of the Annual Monetary Policy that will be announced by the Reserve Bank of India (RBI) Oct 31.
In an exclusive poll conducted by the Confederation of Indian Industry (CII) on various economic issues, 69 percent of chief executives voted against a rate hike.
They reasoned that since the demand for credit was growing at a rate of over 30 percent, any hike in interest rates might slow down the process.
This was also backed by modest inflationary expectations among the industrial community.
Looking at the upbeat performance of the manufacturing sector at 12 percent, 50 percent of the chief executives polled feel that the target for this sector should be set at 14 percent in the coming financial year - higher than the 12 percent growth targeted by the ministry of finance and the Planning Commission.
The mood in industry seemed quite confident as far as inflation was concerned, as it feels the rate would be contained below five percent.
While 38 percent of the respondents felt that the inflation rate would settle between 4.6 percent and 5.0 percent, 23 percent felt inflation would end even lower, between 4.0 percent and 4.5 percent, stated the poll.
However, the same response was not observed on the fiscal responsibility and budget management (FRBM) targets as a meagre seven percent feel that the FRBM targets of fiscal deficit at 3.8 percent and revenue deficit at 2.1 percent would be achieved.
While 67 percent of them feel that fiscal deficit for 2006-07 would be over 4.4 percent, the remaining think the deficit figure could be between 4.8 percent and 5.1 percent.
Source: IANS
Source: IANS