ICICI chief for further rate cuts in view of falling inflation

ICICI chief for further rate cuts in view of falling inflation

New Delhi: With inflation coming down to single digit level of 8.98%, CII chief K V Kamath has said that the key policy rates could be lowered to boost confidence of India Inc and spur growth.

“Interest rates are still high. Inflation has fallen to single digit, I think that would give confidence (to RBI) to roll back or signal drop in interest rate," he said while speaking at the India Economic Summit organised by the World Economic Forum and industry body CII.

He said that the biggest challenge before the country is to keep the confidence level high amid global financial crisis, which has pushed the West into recession.

“I think India is in a distinctly different position. Challenge we have is how do we keep confidence in this global situation," said Kamath, who also heads ICICI Bank.

He further said that India is different because despite global recession it would continue to grow by around 7% in the current fiscal and the growth will not be less than 6% during 2009-10.

Noting that in the next few weeks Indian industry will have to work out strategies to meet the global challenges, he said: “What will drive the Indian economy will be the domestic market".

He further said that de-leveraging, cost cutting and declining commodity prices will have a benign impact on economic growth.