MCHI Against Rate Hikes

By AT Bureau
Urges to control interest rates

MUMBAI: Calling for a fresh thinking to contain inflation, the Maharashtra Chamber of Housing Industry (MCHI), has said that the latest and the 12th hike in the repo rate by RBI is bound to result in a steep jump in interest rates.
Pointing out that the Aam Aadmi or the common man has already been overburdened with ever increasing cost of living, Mr. Paras Gundecha, President of MCHI, the representative body of the developer community, said.
“As we pointed out during the last rate hike, the home loan interest rates are quite high and any further increase will discourage people from borrowing,” Mr Gundecha said. This will impact the real estate sector as sales will further slow down with the rising cost of inputs, he said.
He said the hike in petrol prices last night will have a cascading affect on the economy as it would prove to be a cost-push measure rather than inflation control move. This, coupled with the repo rate hike, would mean that there will be no end to price rise.
As RBI said, food inflation is close to double digit level and it shows no signs of easing despite a good monsoon. Global economy in general also does not show any signs of recovery and RBI itself sounded alarm bells to this effect.
With these, the government now needs to do a fresh thinking on inflationary control measures rather than punishing the consumer with rate hikes. Policy makers need to look at growth and employment generation,
he added.