This Article is From Mar 23, 2014

Rate cut not enough, need 'enabling environment' for growth: HSBC

Besides a cut in key interest rates by the Reserve Bank of India (RBI), the country also needs an "enabling environment" to spur investments, a top HSBC official has said.

"Interest rates are not the only reason why investment is not happening. We need a much more enabling environment for industry, for growth, and interest rates are one criteria which is a deterrent," Kidwai said on the sidelines of a water conservation conference here last week," HSBC country head Naina Lal Kidwai said.

Retail inflation in India easing to a 25-month low of 8.1 per cent in February and a slight improvement in industrial growth have raised hopes for a rate cut by the Reserve Bank of India (RBI) in its monetary policy scheduled for April 1.

Inflation fell to 9-month low of 4.68 per cent in February due to easing prices of kitchen staples like onion and potato.

Ms, however, said, "I think there will have to be a sustained performance on inflation before interest rates begin to come down. But at least it appears at the moment that interest rates won't go up."

Industrial output entered a positive territory in January with a modest growth of 0.1 per cent after contracting for three months in a row.

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