India Inc makes a case for single-digit lending rates

New Delhi (PTI): Concerned at the declining industrial growth, industry chambers on Thursday suggested that lending rates should be brought down to single-digit levels.

The slowdown in industrial growth underlines the need for ensuring that the measures announced in the economic stimulus packages are speedily implemented, Ficci said in statement.

"The chamber has been pointing out that interest rates at the retail level have not yet been fully adjusted. Unless the lending rates are brought down to single-digit levels, economic recovery will take a long time," said Ficci president Harsh Pati Singhania.

During January industrial output showed negative growth of 0.5 per cent, highlighting that stimulus packages have failed to perk up manufacturing as well as mining so far.

However, Mr. Singhania said that hopefully India should see some recovery from February 2009 onwards particularly in the context of improved demand seen in sectors like automobiles, consumer durables and cement.

Assocham says continuing contraction in industrial production in the last few months is indicative of the fact that India's growth momentum is in for serious trouble.

"The fall in India's industrial output of January shows that Indian Inc has fallen under the severe pressure of slowdown at least for some time," Assocham president Sajjan Jindal said.