The Hindu Business Line : Govt favours benign interest rate regime

THE Finance Secretary, Mr D.C. Gupta, today said that the Government was in favour of a `benign' interest rate regime. ``Any hike in rates will hit growth that we will not like to have,'' Mr Gupta told newspersons.

However, he added that it was primarily the task of the Reserve Bank of India to decide on the interest rate regime.

On GDP growth, Mr Gupta said the economy should grow by 6-7 per cent this fiscal, given the trend of the first-quarter GDP growth of 7.4 per cent.

According to him, inflation trends would depend largely on external factors such as rising crude prices. ``Inflation has to be watched, but it depends on external factors like hike in oil prices.''

The Finance Secretary also said that the Government does not plan any further duty cuts to check inflation.

He refused to give an indication on whether the Government proposes to introduce specific duty on petroleum products instead of ad valorem rates currently.

He merely said that a committee would go into all aspects of duty structure and is expected to submit the report within a month. ``Everyone is concerned. It is not necessarily a supply constraint. Fuel price hike always has an impact.''

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