In past 17 months RBI has hiked interest rates by 12 times in order to control the high inflation rate but this strategy failed miserably and has slowed the Indian economy. The growth rate that was experienced by the economy and by the businessman for about a year in 2009-2010 is likely to be over soon. The growth rate in 2011 has fallen to 7.7%. In last five year plan finance minister said that India will maintain 9% GDP this year but it seems they have failed to keep their promise.
Even the reserve bank of India said that rate of growth of economy will be not less than 8%.
The increase in interest rates of bank has sucked all the credit from the market. The rates for borrowers have gone up to 3% in last 17 months. The growth rate which was set by the government in 2008 and 2009 got affected by the high interest rate of banks. There are 100 hundreds of companies that have turned towards the foreign market in order to be on the safer side. Big companies have shifted towards foreign money .The main reason of this step by the companies is decline in industrial growth. There are many real estate companies who have been continuously investing in real estate, offshore oil development, telecom and power.
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