The Hindu Business Line : Interest rate must not be raised: CII survey

Although the demand for credit is growing at a healthy pace, the current interest rate must be maintained to keep the growth momentum on track, said 69 per cent of respondents to a CII survey. The respondents felt that while conducting the mid-term review of the annual monetary policy, likely to be announced next month, the Reserve Bank should ensure that interest rates are not raised.

The respondents were confident that inflation would be contained below 5 per cent for the current fiscal. As many as 38 per cent of the respondents felt that the inflation rate would settle between 4.6 and 5 per cent, while 23 per cent felt that inflation would end even lower between 4 per cent and 4.5 per cent.

FRBM targets

However, the same optimism was not shared for the FRBM (Fiscal Responsibility and Budget Management) targets. Only 7 per cent of the respondents felt that the FRBM targets (of fiscal deficit at 3.8 per cent and revenue deficit at 2.1 per cent) for the current fiscal would be met. As many as 67 per cent of the respondents felt that the fiscal deficit for the year would stand at upwards of 4.4 per cent, while 33 per cent felt that this would be between 4.8 per cent and 5.1 per cent.

The mood has been buoyant for the manufacturing sector. As many as 50 per cent of the respondents felt that the target growth rate for the sector should be set at 14 per cent or above.

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