Rate hike to hamper industrial growth: Sharma

A day prior to the Reserve Bank of India's (RBI) third-quarter monetary policy review scheduled for tomorrow, Union Commerce and Industry Minister Anand Sharma said any rise in interest rates would hinder industrial growth. "Inflation is definitely a cause of concern. But it cannot be curbed by increasing interest rates. Instead, for the development of industry and growth of the economy, there is a need to provide easy credit to the industrial sector," Sharma told reporters on the sidelines of an event organised by the CII here today.   The RBI is widely expected to raise key short-term rates tomorrow to rein-in inflation.  There is a need to allow capital inflows and easy credit flow for the growth of economy, he said. "For a clear growth of the economy, there is a need for capacity addition. Foreign capital inflows and making credit easily available for the industrial sector by public sector banks will ensure robust industrial production," Sharma said. Cutting exports would only lead to cutting economic growth and not inflation. "This will result in job loss," he said.  On the government's policy on foreign direct investment (FDI) in retail, Sharma said, "We are actively considering allowing FDI in the retail sector. We have received inputs from stakeholders and investors and (now) have to formally finalise the issue."