India Inc may hold new projects, fears Kamath

NEW DELHI: Confederation of Indian Industry (CII) president and ICICI Bank chairman K V Kamath on Tuesday said India Inc may put on the back burner investments that were at the concept stage because high interest rates were pushing up project costs. He also said the profitability of companies is being affected due to higher lending rates, high commodity prices and costlier inputs.

���May be projects at the concept stage, which were on the back burner may not come to the front burner,��� Mr Kamath told reporters after a meeting of industry leaders with finance minister P Chidambaram.

He, however, said the finance minister has assured the industry of a GDP growth of 8-9%, and the industry is optimistic of a GDP growth of 8-8.5% this fiscal. He also said investment of $700 billion would take place in the country over three years.

Talking about the Singur controversy, Mr Kamath said the state government should take concrete steps to solve the problem or its reputation as an investment destination would be impacted.

���This is something the state needs to address if it wants to be a magnet for industry,��� he said, adding that he was sure the industrial group concerned and the state government would find an amicable solution. He, however, mentioned that the issue had not been discussed with the finance minister.

The CII president said he did not see respite from monetary tightening so long as high inflation persists. Mr Kamath said Mr Chidambaram had quoted figures from CMIE, which talks of a monthly accretion to new projects at Rs 1,50,000-1,70,000 crore, which would be $40 billion, and hit $450-480 billion on an annualised basis.