• Investment World
• eWorld
• Brand Line
• Mentor
• Life
• Brand Quest
• The New Manager
• Smartbuy

Stocks

• Quotes
• SE Diary
• Scoreboard
• Open-End Mutual Fund

Cross Currency

• Rates
  
  

Shipping

• Ports
  
  

Archives

• Yesterday
• Datewise
• Resources
• In Focus
• In Depth
• Events 2007

Group Sites

• The Hindu
• The Hindu ePaper
• Business Line
• Business Line ePaper
• Sportstar
• Frontline
• The Hindu eBooks
• The Hindu Images

J. Suresh Kumar

The central bank must be complimented for an industry-friendly policy. Clearly, the Government and the central bank are focused on containing inflation without compromising on the growth requirements of the country and industry.

Availability of credit, particularly to the infrastructure sector, is a priority for the central bank and therefore a source of comfort. The liquidity position is good and not a cause for concern. The 20 per cent liquidity growth projection for 2008-09 appears reasonable.

For the infrastructure sector, the new norms for financing projects would make banks more willing to lend. The new norm that the date of completion of the projects financed by banks should be y spelt out at the time of financial closure of the project, and the account should be treated as substandard only if the date of the commencement of commercial production extended beyond a period of two years after the date of the completion of project envisaged originally, is more practical.

The intention of the central bank is to weather inflation through better supply side push where signs of improvement are visible. At the same time there is enough emphasis on ensuring that the financial markets are stable.

The home loans market would get a further boost with the increase in threshold home loan limits to Rs 30 lakh for the purposes of risk-weightage calculations. As a note of caution of central bank believes that the turbulence in the international commodity markets and financial markets would have a bearing on the Indian economy, thereby impacting growth to sub-8 per cent levels.

More Stories on : Credit Policy

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page

Stories in this Section
Inflation control and beyond

Copyright © 2008, The Hindu Business Line. Republication or redissemination of the contents of this screen are expressly prohibited without the written consent of The Hindu Business Line