Kolkata, March 5 (IANS) Bharatiya Janata Party leader Yashwant Sinha Saturday termed high interest rates and an uncertain growth in agriculture sector as major threats to the high GDP growth projection for the coming fiscal.
“The GDP growth projection for the next fiscal is nine percent. The first threat to the high growth projection is the high interest rate. One of the major steps which unleash the demand is moderate inflation. If you have high inflation, then it is going to be high interest rates,” Sinha said during a session on ‘Union Budget 2011’, organised by Bharat Chamber of Commerce (BCC) here.
“High interest rate is a major disincentive to investment. We seem to have relaxed into high inflation and high interest rates. It makes capital price high,” Sinha, a former finance minister, said.
He said the second major threat to growth was agriculture.
“Agriculture has been buoyant last year. But will this high growth sustain? Agriculture remains a cause of concern. Indian agriculture still depends on monsoon. Thus agriculture remains a big question,” he added.