If you have been wondering why the Reserve Bank of India Governor D Subbarao has been persistently raising interest rates despite protests from leading chambers of commerce then just take a look at India’s consumer durable and consumer staples manufactures who do not see any decline in festive season sales post Thursday’s rate hike. In fact even banks believe that their retail loan portfolios would continue to grow, albeit at a slower pace this year. The Reserve Bank of India’s move of hiking key rates by another 25 basis points is really bad news for the industry and the corporate sector. Growth is clearly showing signs of being impacted with successive monetary policy actions and a severely challenging global economic situation. Clearly, investment and growth plans of the corporate sector will now need to be revisited,” said Harsh Goenka, chairman at RPG Enterprises. Leading industry association CII too said it’s concerned that with inflation and interest rates continuing to rise, the growth outlook for the country is deteriorating rapidly.
Financial Chronicle
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