Interest Rates and industrial growth

This comment in response to the Article "RBI right in sticking to its guns" appeared in The Hindu Businessline dated 17/09/11.


The author is right in the sense that the interest cost cannot be cited for the problems faced by the industrial sector.The credit off take is more than the expectations and the credit deposit ratio has been on the higher side indicating continuous demand for credit and banks are meeting them thanks to the liquid adjustment facility made available by the Reserve Bank.Industrialists by nature clamour for more facilities and concessions as they do not want to sacrifice a bit of profit though they have umpteen ways to cover up the small interest cost caused due to RBI's monetary policy. The inventory management and luxurious style of living by our corporates' bigwigs add to the cost of production and it is time special measures are taken to avoid excess inventory, avoidable waste and introduce austirity measures in the over all expenditures of the company. The accountability of auditors has been virtually absent in our corportae accounting practices and this needs to be reviewed.

Dr.T.V.Gopalakrishnan