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Fresh investment flow not affected by inflation
There has been no impact on the pace of capital investment in India even after the RBI imposed stringent monetary measures to curb inflation, a Centre for Monitoring Indian Economy (CMIE) report has said.
“Rising inflation and the RBI’s attempts to combat it through monetary tightening are leading to fears of the investment boom in India cooling off,” the CMIE said. The pace of fresh capital investment, however, continues unabated, the think-tank said. “The relentless rise in the flow of fresh capital investments reflects India Inc’s confidence in the continuation of buoyancy in the consumption demand.” According to the report, although rising interest rates are expected to dampen the profitability of Indian corporates, “it is not a very significant burden to make them cancel their fresh investment plans or stall those under implementation…Our close monitoring of projects through the CMIE CapEx service shows acceleration in the announcement of fresh investment,” it said.
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