The Reserve Bank of India’s 12th rate hike on Friday has evoked sharp reactions from Corporate India. Companies from auto to real estate, infrastructure and fast moving consumer goods have expressed their angst at the central bank’s 25 basis point hike. Most have described the move as being detrimental to the growth of the economy.

Says Harsh Mariwala, chairman & managing director, Marico, also the president of Federation of Indian Chambers of Commerce and Industry (Ficci), “This is not the way forward. I think supply-side bottlenecks have to be tackled aggressively. I don’t think inflation can be tamed using monetary policy alone.”

Adi Godrej, Chairman of the Godrej Group says, “This policy of hiking rates has simply not worked. I think the rupee should not be allowed to depreciate. That adds to inflation.”

H M Bharuka, managing director of Kansai Nerolac Paints, too, has expressed disappointment with Friday’s hike. “I don’t think we can allow growth to slow down. It has serious repercussions for us as well as the economy because capital inflows will slowdown and so will investment. As a company, we are seeing a slowdown in housing, auto and infrastructure. With further rate hikes, this will only get worse.”

In the past 18 months, home loan rates have gone up by three-four per cent. Add to this persistent food inflation and consumers have been struggling to carry this weight, reason experts. “Clearly, consumers are under pressure,” says R R Singh, Director General National Real Estate Development Council, an apex body of developers. For more visit: Business Standard

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