Monetary policy: RBI rate hike will impact India Inc's capex, says CII

Many lenders had increased their lending rates prior to the policy review and after that, indicating a broader direction in which the rates are headed

Rate hike by the Reserve Bank of India will increase the cost of doing business and impact capital expenditure by India Inc, industry body Confederation of Indian Industry (CII) warned on Tuesday.

“The cost of doing business goes up because of the hike and it will impact capex (capital expenditure) by the industry,” CII president and vice-chairman of Bharti Enterprises Rakesh Bharti Mittal told reporters here.

He was, however, quick to add that the normal monsoon and supply side measures will have a cooling effect on inflation and help restrict the rate hikes to just the one taken earlier this month.

The industry