Interest rates need to come down: Kamath

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New Delhi, Nov 16: The annual India Economic Summit, hosted by the Confederation of Indian Industry and the World Economic Forum, which began on Sunday amidst one the worst global financial crisis in recent times, while acknowledging the gravity of the situation had an underlying message—We Shall Overcome.

The who’s who of India Inc harped on the strong fundamentals of the Indian economy and the resilience of their respective sectors to drive home the point that things would improve in the medium to long-term.

Making a case for further cut in interest rates, ICICI Bank, CEO and CII president, KV Kamath said the government had taken prompt and appropriate measures to avert major disasters.

“Interest rates are still high. Inflation has fallen to single digits, I think that would give confidence (to RBI) to roll back or signal drop in interest rate,” he said. The biggest challenge before the country is to keep the confidence level high amid global financial crisis, which has pushed the West into recession, he said. “I think India is in a distinctly different position. The challenge before us is to be confident in this global situation,” Kamath said. India, he said, 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.

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

Rajat M Nag, managing director-general, Asian Development Bank harped on the resilience of the Asian financial sector. “NPA and short term external debt is low while capital adequacy ratio is good across Asia.

Since fundamentals are strong no full blown crisis will be felt here. It is important that we look at medium to long term development”, Nag said.

Nandan M Nilekani, Infosys Technologies Ltd co-founder and co-chairman, said, that there is an overall slowdown in the IT sector, but it is resilient enough to sail through the crisis. “Our company will go ahead with its plan of hiring people. The growth in the IT sector during the current fiscal will not be as good as witnessed for the last four years”, Nilekani said.