High interest rate not primary reason for poor growth in India: RBI

MUMBAI: The high interest rate is not the only reason for the slowdown in economic growth that fell to a nine-year low of 5.3% during the March quarter, according to Deputy Governor of Reserve Bank of India KC Chakrabarty.

Chakrabarty said, “To say that growth is going down only because of interest rate is not correct.” He also said that there have been many other reasons responsible for the poor growth rate.

RBI aims to maintain balance between growth and inflation. It also one of the most important area of concern for the central bank.

As inflation continues to cause worry and central bank would be developing its policy taking into account both inflationary pressure and growth.

According to the data released by the Central Statistics Office, India's economic growth fell to a nine-year low of 5.3% during the fourth quarter of fiscal 2011-12.

India's gross domestic product rose by 6.5% during FY12, which is lower than the 6.7% level during 2008-09.

He also hinted that RBI would lower interest rates only if there is definitive fall in inflation.