Bhubaneswar, Sep 18: High inflation rate and increase in the interest rate has posed a major challenge to the Indian industry, CII President K V Kamath said. Mr Kamath, who attended the National council meeting of the CII, told newsmen that few months back the mood was upbeat among the industries when we met in Hyderabad.
But things have changed after that with the interest rate and the exchange rate being very high along with the sharp rise in inflation. The rupee, he said has become very weak and the foreign exchange balance has worried everybody.
Mr Kamath however, said it was too early to say whether these factors would have any impact on the industry. Though the inflation has slightly reduced but the interest rate has gone up very high,the CII President said adding that a clear picture would be known only after one or two quarters as the industry would prefer to wait and watch over the current happenings.
To a question, the CII President said the crash in stock market would have no bearing effect in the industry in the country as most of them today depended upon their own internal resources instead of market borrowing.
Mr Kamath said ten years back the situation was altogether different but now large part of investment,almost 65 per cent by the domestic industry has come from the internal resources.
The industries, he made it clear, had not been affected due to the terrorist attack as nobody had been threatened to change their plan. '' We are not afraid nor being cowed down by such attack, '' the CII President remarked.
On the Banking sector, he said the Banks in India were in much better shaped in compare to the global Banks due to the reform process undertaken during the last decade.
The Indian Banks, he further said, were not contaminated following the happenings in the world, adding that they were strong enough to withstand any challenge.