India Inc confident of lower interest rates

Monday, 30 July 2007, 07:00 Hrs
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New Delhi: Captains of the Indian industry are confident of interest rates coming down as the country's central bank gears up to launch the credit policy Tuesday, says a survey by leading industry body.

Inflation in the current fiscal (2007-08) is also going to be within the permissible limits due to a normal monsoon, said the survey conducted by the Associated Chambers of Commerce and Industry (Assocham).

"Interest rates have to be downward as inflation has been normal and within the permissible limits. Moreover, adequate liquidity is available in the market. Majority of respondents said that there was a 17 percent rise in the PLR (prime lending rate) in June 2007 over June 2006," said Assocham president Venugopal N. Dhoot.

As much as 95 percent of the respondents said the recent rise in interest rates would adversely affect their bottom-lines and would be reflected in the second quarterly results.

The chamber also said the booming housing sector wass mainly responsible for the hike in mortgage lending. The interest rates for housing loans have risen to around 12 percent.

"India's forecast of real estate growth is from $12 billion 2005 to $90 billion by 2015. Greater integration with the global economy and the increase of domestic as well as foreign investments are encouraging the demand for real estate," Assocham said in a statement.
Source: IANS
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