Industry chambers mixed hopes, expectations and recommendations on Sunday as they eyed the Reserve Bank's credit policy review this week, aiming for a cut in signal interest rates or at least a hands-off regime.
Their hopes rested on a headline inflation number, which at 4.41 per cent on last call, stays under control but still remains not far from 5 per cent, as primary commodities like politically crucial food items continue to flirt with worrisome levels.
A survey of chief financial officers (CFOs) by industry chamber Assocham revealed that 95 per cent of corporates admitted that high interest rates would adversely impact their balance sheets, while 85 per cent of the 300 surveyed anticipated a downward revision in rates in the policy announcement due on Tuesday.
The survey covered 150 corporates, 100 bankers and 50 real estate players. Realtors have been the most watched by the scrutinising eyes of central bankers, who are keen to check runaway speculation in land prices.
"Interest rates have to be revised downward as inflation has been normal and within the permissible limit. Besides, adequate liquidity is available in the market," said Venugopal N Dhoot, Assocham's president who controls the Videocon group.
The Confederation of Indian Industry (CII) was looking for an easier money regime as well.
"CII suggests that in the wake of inflation moderating, monetary tightening measures introduced earlier by the RBI to contain inflation could be eased due to lower levels of inflation registered in the past weeks," it said in a statement.
Batting for growth, CII said the atmosphere was such that rates must ease.
"The declining non-food credit off-take, appreciating rupee and high interest rates are expected to impact investment rates which would reduce the pace of economic growth in India and would also impact exports due to erosion of profit margins of exporters," CII said.
The Federation of Indian Chambers of Commerce and Industry (FICCI), digging deeper into the inflation numbers, called for long-term measures to boost agriculture, the sector whose facilities and stalling productivity often shows up in difficult price levels because of a shortage of supplies to meet growing demand.
A FICCI survey called for the strengthening of agricultural extension systems, efforts to remove barriers to make India "one common market," increasing awareness of futures trading among farmers to discover prices and the encouragement of the private sector to develop infrastructure and technology to aid marketing of farm produce.
Assocham observed that the monsoon appeared to be normal and an appreciating rupee also made imports - and therefore supply management - easier.
As many as 90 per cent of surveyed CFOs felt there was excessive liquidity sloshing about in the market, and more was expected in view of capital inflows.
"Money supply continues to grow at robust pace of over 21 per cent driven largely by accelerated growth in term deposits of banks," it said, adding that the housing sector had been hit by high rates.
The CII observed that non-food credit off-take between March 31 and May 25 declined by 2 per cent, and total bank credit also showed a similar trend.
"Such a trend is a major cause for concern on economic expansion and hence would have a downward impact on economic growth," it said.