......As the previous Reserve Bank of India Governor Duvvuri Subbarao argued towards the later part of his governorship, interest costs did not determine investment decisions since it was less than 3% of revenues. But the interest rate, or the returns, is a deciding factor for an individual in choosing between financial savings and physical assets. However much one would preach the virtues of equity, or mutual funds investments, Indians' natural choice is a bank deposit. The mutual fund industry's two-decade wait for individual savings to flow into its coffers is a testimony to it. If the banking system pushing up deposit rates well above 10% (yet to happen, but the danger is real) is not welcome, the government should consider correcting a lopsided tax policy. ..............
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