Weighed Down

The latest RBI annual report says that the hardening of interest rates last fiscal is a matter of serious concern, and the high real rates of interest would force down the demand for bank credit and lead to a slowdown in industrial activity. A cursory glance at some macro-economic indicators reveals the validity of RBI's statement. Growth in industrial production has slowed down and both imports and exports have reduced drastically. All these are very unhealthy signs.

In fact, one only needs to apply the business cycle concept to confirm the negative feelings. Stockbrokers James Capel B&K finds the cycle declining from the peak and says