Put off rate hike: India Inc.
New Delhi, Feb. 11: Leading industry chambers on Friday urged India’s central bank not to raise interest rates again.
This comes after data showed that India’s industrial output in December 2010 grew at its slowest pace in almost two years, rising by a only a modest 1.6 per cent.
The large base effect may have been one of the causes for sharp slowdown of the manufacturing sector in December, besides tight monetary policy and partial exit from the stimulus, said Mr Rajan Bharti Mittal, president of FICCI.
The growth of the manufacturing sector is moderating as is evident from the fact that machinery and equipment segment has witnessed a negative growth of 12.8 per cent in December, Mr Mittal said.
For January, capital goods and consumer non-durable goods showed the most negative growth. Important items registering high negative growth included computer systems and peripherals (-52.2 percent) along with agricultural implements (-49.6 per cent).
Commenting on the latest data, the finance minister, Mr Pranab Mukherjee, said the data was disappointing but on expected lines. He, however, said that monthly numbers did not reflect the actual scenario.
Therefore, you shall have to take the whole year into account. Let us see how it reflects in the annual picture, he said.
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