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'Rising inflation, interest rates major concerns'

New Delhi, 22 April, 2011

Rising inflation, input costs, oil prices and steep interest rates are the major issues that are threatening the growth momentum of the Indian economy, a top Hero Group official said.

"The high growth rate that the government has set may be impacted due to these factors," Sunil Kant Munjal, chairman of Hero Corporate Service Limited, told reporters on the sidelines of Mindmine Summit 2011 here.

According to Munjal, the Hero Group is currently unaffected from these factors, but the same cannot be said about smaller businesses.

"Since smaller businesses do not have a very high credit rating, they would be affected by high interest rates and this will have an impact on the long-term investments in the economy," he said.

Replying to a question on the positive impact on the industry of a good monsoon prediction, Munjal said: "Well, a good monsoon is of course good for the agriculture and if agriculture grows by four percent, then it will definitely have a good impact on the services and manufacturing sectors as well."

Recently, the India Meteorological Department (IMD) forecast a normal monsoon this year. Economists also predict that a normal to good monsoon will boost the government's efforts to contain food and overall inflation, which is still above the comfort level.

The country's agriculture sector, which is 60 percent dependent on rains, will also be able to grow at the above-3 percent level, economists said.

The summit also saw the sixth BML Munjal Awards for Excellence in Learning and Development being conferred on Punjab National Bank in the public sector category and Tata Power in the private sector category.

A special commendation award was also conferred on Power Grid Corporation of India Ltd.

"They (awards) are given to companies that have consistently used training, learning and development as a source of competitive advantage and as a strategy for their business," Hero Mindmine Institute said in a statement.    
 

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