Much hurdles ahead

Rising rates of interest seem to hit new investments in Indian market as the trend of increasing rate is in arithmetic progression. Apex industry chamber Confederation of Indian Industry (CII) has also warned recently that growing interest rates may hurt new investments, even though resources to the tune of $700 billion are in the pipeline over the next three years. While existing investments in the pipelines were being adhered to, newer projects which are in planning stage may not come to the front as it presumed.
At this moment, the investors are concerned whether high inflation would mean that consumer demand would slowdown or even whether the consumers could afford to buy or purchase what they intend to buy or purchase. Apart from that as long as high inflation persists, any easing of monetary restrictions may not be possible. As inflation is the bone of contention, it is impractical to expect any easing out of monetary policy from the government, even though the Finance Minister’s assurance to look into the matter.
The worry for the Indian govt. is it intends to keep the growth rate at satisfactory level of 8-9% this year. Without substance new investments, it is next to impossible to achieve the targeted growth, which is very well known to Finance Ministry & pecuniary pundits. The outlined factors for falling demand in new investments are high interest rates, inflation, high commodity price & uncertainty in share market and to some extent the liquidity problem in US & Europe.
In this situation to bailout the problem, perhaps Finance Ministry has to work day & night to bring down the inflation, thereby the interest rates & toil hard to install confidence in the industry to attract investment plans from them. The present rate of 36% investment may well bring a 8% growth in the country but the worry is, if the present trend of odds continue, the investment may fall, which would bring down the growth below 8%. Apart from that it is also dependent upon the global situation. Let us hope the situation in international & internal market improves to build confidence in investors.