Govt's Economic Advisers Downplay Industrial Slump

With India Inc blaming high interest rate regime for decline in industrial output growth, Planning Commission Deputy Chairman Montek Singh Ahluwalia today said there is no connection between the two.

"I would not draw any connection between the rate hike and decline in industrial production. The rate today is roughly what it was when the economy was growing at 9 per cent," Ahluwalia said when asked if RBI's tight monetary policy was hampering industrial production.

The Reserve Bank has hiked interest by 3.75 per cent since March 2010 to tame inflation, which is hovering at around 10 per cent. The high interest rate regime has made credit expensive for corporate as well as consumers, which the industry says has hit growth.


From: http://ping.fm/xCXhI