Kolkata: An official of India’s central bank said some industries are trying to take advantage of the present crisis by getting concessions from the government and the Reserve Bank of India (RBI).

The RBI official said there “may be instances where certain interest groups want their agenda to be pushed through" while the central bank is going about making policy changes to infuse liquidity into the system in its efforts to bolster the sagging economy.

Reading signs: Reserve Bank of India governor D. Subbarao says growth projections may be pared during RBI’s scheduled review in January. Abhijit Bhatlekar / Mint

Demands for relaxation in external commercial borrowing norms and concessions for the real estate sector have nothing to do with tackling the crisis, the RBI official said.

RBI governor D. Subbarao— who, along with other central board members, is in Kolkata for a meeting on Thursday—said though RBI and the government had taken steps to shield the economy from the effects of the global crisis, there would be a period of painful adjustment.

He said the central bank would take a fresh look at its growth projections when it meets for a scheduled review in January. “All indications are that it may be revised downwards," Subbarao said.

At its October review, RBI projected 2008-09 growth at 7.5-8% with a downward bias. Many economists expect growth at around 7%.

On Wednesday, Morgan Stanley cut its India growth forecast for the year beginning April 2009 to 5.3% from 5.7% earlier, due to falling demand in the wake of a worsening global economy.

According to the RBI official, some regulatory forbearance is required to boost the economy, but “we cannot give up on the basic tenets of the system".

The official also debunked criticism against the central bank for being too slow in addressing the liquidity problem into which the Indian financial system plunged after the collapse of Wall Street investment bank Lehman Brothers Holdings Inc. in mid-September.

“RBI has to assess the cost and benefits of any measure that it could take. For instance, we cannot bring down the statutory liquidity ratio (SLR) below a certain point as that could jeopardize the stability of banks," he said. SLR is the portion of deposits banks are required to invest in government bonds. RBI has brought it down from 25% to 24%.

Since he took over as governor in the first week of September, Subbarao has cut the cash reserve ratio, the proportion of bank deposits that is to be kept with RBI, in stages by 3.5 percentage points to 5.5%, releasing Rs1.4 trillion into the system, and SLR by 1 percentage point. RBI has also cut the repo rate—the rate at which it lends to banks—by 2.5 percentage points to 6.5% and reverse repo—the rate at which it sucks out liquidity—by 1 percentage point to 5%.

Tamajit Pain of Reuters contributed to this story.