SME Times News Bureau | 07 Apr, 2011
The Indian industry Wednesday made a strong plea to the Reserve Bank to review its rate tightening policy, saying the high cost of credit is having an adverse impact on growth.
The RBI recently had hiked its short-term lending and borrowing rates by 25 basis points each for the eighth time in 15 months to tame inflation.
Quoting a recent study, industry body FICCI's Vice-President and HSBC's Country Head, Naina Lal Kidwai, said a majority of firms feel inflation and successive rate hikes in the key monetary variables "have started having a bearing on the industry's performance."
"India Inc is worried about the significant impact of the increasing inflation and interest rates on their operations...further rate hikes by RBI could impact investment plans and activity levels adversely going forward," she was quoted as saying by a news agency at the customary pre-policy meet with RBI top brass ahead of the annual monetary policy announcement due on May 3.
To tame the headline inflation number which stood at a higher-than-comfortable 8 percent.
