By IANS
New Delhi : Leading Indian industrialists and businessmen have called for caution as the annual rate of inflation shot up to a three-year high of seven percent for the week ended March 22, causing prices of essential commodities to rise.
Corporate India has also expressed hope over the government’s recent fiscal measures to control the prices of important products such as food items.
“While the decision to cut customs duties on food and essential commodities will make imports cheaper, the efficacy of these measures will be limited in the medium term,” said the Federation of Indian Chambers of Commerce and Industry (Ficci).
It cautioned the government against any further hike in interest rates that would extremely harm the economy.
“The high interest rate charged (15-17 percent) by banks for lending purposes has negatively impacted the profitability by 20-25 percent as well as long term expansion plans of these companies,” the forum added.
K.V. Kamath, managing director and CEO of ICICI Bank and president (designate) of the Confederation of Indian Industry (CII) said: “I am sure policy makers both at the monetary level and in the ministry will work together to ease supply side constraints.”
“We will see growth happening because growth is today embedded into the way we have set our reform processes also. So growth may slowdown from 10 percent to around eight percent (in 2008-09),” cautioned Kamath.
“It took us over 10 years to grow from $500 to $1,000 per capita income. The focus now should be to achieve a per capita income of $2,000 in the next eight years,” Kamath said.
However, according to Venugopal Dhoot, president of Associated Chambers of Commerce and Industry of India (Assocham), “The GDP (gross domestic product) growth for the current fiscal would exceed 8.5 percent.”
Lauding the government’s effort in checking the spiralling inflation, Dhoot, also chief of Videocon Group, said: “A few more steps should also be taken by Reserve Bank of India (RBI) for curtailment of interest rates as also ensure sufficient liquidity to Indian Inc. With these steps the monetary market would relax and offer relief.”
On Monday, the government took steps such as banning export of non-basmati rice and pulses, scrapping import duties on non-refined edible oil and cutting import duties on refined oil, butter, ghee and maize to check rising prices.