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Industry wants stable interest rate

Special Correspondent

NEW DELHI: Industry is keen that interest rates should be maintained at the current level, according to a survey carried out ahead of the mid-term review of the monetary policy by the Reserve Bank of India.

According to a poll conducted by the Confederation of Indian Industry (CII), corporates feel that the RBI should not raise the interest rates further.

The survey shows that 69 per cent of CEOs polled feel that the central bank should maintain the interest rates at the present level to keep the growth momentum on track since the credit pick up is over 30 per cent.

The RBI is scheduled to announce its mid-term review of credit policy on October 31.

At the same time, the CII has found that the inflation rate does not seem to be too much of a concern for industry. Most CEOs felt that inflationary expectation remained modest and was likely to be contained below the five per cent mark for the current fiscal.

On the other hand, the mood of the respondents on the manufacturing sector has been buoyant.

A CII release says that reflecting the sentiment, 50 per cent of the respondents believe that the target growth rate for the manufacturing sector needs be set at 14 per cent and above.

This assumes significance since the Finance Ministry and the Planning Commission have set a growth target of 12 per cent for the sector.

The survey also shows that industry is sceptical about fiscal management of the Government and a majority perceives that the Government is likely to miss the fiscal target set by this year's budget.

As per the 2006-07 budget, the fiscal deficit is pegged at 3.8 per cent of the GDP, while the revenue deficit is targeted to be 2.1 per cent of the GDP.

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