Industry bodies meet RBI, express inflation concerns

Officials from the Reserve Bank of India (RBI) on Wednesday met industry representatives and discussed the current industry environment. The meeting was attended by members from Ficci, Assocham and Crisil, among other trade associations.

In the customary pre-credit policy meeting, industrialists raised concerns on rising inflation and interest rates and their impact on trade.

Naina Lal Kidwai, vice-president, Ficci, said more rate hikes by RBI could impact investment plans and activity levels adversely. “I think there is no need of rate hike in current situation but RBI will take a call depending upon the credit offtake and many other factors,” said Niranjan Hiranandani, chairman and managing director, Hiranandani Group. He said the real estate sector had brought to RBI’s notice the fact that prioritisation of home loans up to Rs 30 lakh is not practical, as far as Mumbai, Delhi or other metropolitan cities are concerned.

Dilip Modi, president, Assocham, said the demand for credit from private sector needed to be met. “There is an opportunity to leverage this situation to increase the credit flow to the private sector, central bank should take note of this and accordingly review the need to resort to tight monetary policies during the current fiscal,” he said.

RBI will announce the Annual Monetary and Credit policy for 2011-12 on May 3. Broadly market expectations are that RBI will go for further rate hikes as inflation is still at high levels.