Mr. Habil Khorakiwala, FICCI President, that in the context of the slowdown in industrial growth, RBI could have done some rethinking on the interest rate regime and finetuned the rates.
A revival in the growth of industry and services, he maintained, is essential to sustain a high rate of economic growth.
Overall industrial growth in November this year plunged to 5.3% compared with 15.3% in the corresponding month of 2006-07.
In the first six moths of the current fiscal (April-September) industrial growth was 9.4% compared with 11.1% in the corresponding period of 2006-07.
Along with the rising rupee, high interest rates, the FICCI chief said, have taken a big toll on several sectors of the economy, particularly the small and medium enterprises.
In fact, apart from housing, construction and consumer goods, the high interest rate regime is adversely impacting the intermediate and capital goods sectors.
With inflation moderated to tolerable limits, the RBI could have shifted its emphasis from controlling inflation to sustaining the overall growth momentum, Mr. Khorakiwala said.
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