Sharma cautions on rate hike

Commerce and industry minister Anand Sharma on Tuesday cautioned that a further hike in interest rates could decelerate industrial growth that had already plunged to an 18-month low of 2.7% in November. HT reports.

Commerce and industry minister Anand Sharma on Tuesday cautioned that a further hike in interest rates could decelerate industrial growth that had already plunged to an 18-month low of 2.7% in November.

HT Image

“The high inflation in primary articles is more on account of supply side constraints and monetary policy may not be the most suitable intervention to deal with the situation,” Sharma said in a letter to finance minister Pranab Mukherjee.

“Industrial sector clearly needs sustained support to enable complete recovery,” he said.

The Reserve Bank of India’s quarterly monetary policy review is scheduled next week.