‘Investment flow to sustain 8 pc growth in 2008-09’
Though inflation, rising interest rates and high wage and input costs for the industry were expected to hurt their growth last year, the corporate performance was unaffected, reports BS Srinivasalu Reddy.business Updated: May 22, 2008 23:35 IST
The Rs 3,00,000 crore ($700 billion) of investment underway in the country is set to keep the economic growth pace above 8 per cent during 2008-09. This is despite challenges like higher inflation, possible rise in interest rates and spiralling input costs for industry, said KV Kamath.
However, Kamath does not see interest rates going up soon in the wake of abundant availability of funds with the banking system. Even bond markets do not point to a hike interest rates now. “Strong profitability over the last four years enabled the companies to invest $700 billion in various projects under implementation now. This is likely to check slowdown in the economy,” said Kamath, president of the Confederation of Indian Industry (CII). The CII is expecting the economy to grow between 8.28-8.61 per cent during the current fiscal.
Though inflation, rising interest rates and high wage and input costs for the industry were expected to hurt their growth last year, the corporate performance was unaffected. “The corporate sector has responded admirably to these challenges in 2007-08, reflecting their resilience in the face of difficulties,” he added.