It is now certain that the growth rate of the Indian economy will be much lower than the RBI projection of 7.2 percent. So, the anxiety is understandable. Will keeping the interest rate low help? The fact is soft pedalling on interest rate hikes can harm the prospects of returning to high growth rates even more than high interest rates in the economy. The concern is that the high interest rates will reduce credit uptake, and hence investment.
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Published in Moneycontrol.com on
September 28, 2022