‘RBI credit stance must not hit growth’

Commerce and industry minister Kamal Nath on Thursday said that the RBI should revise monetary policy and ensure that credit contraction does not lead to decline in industrial growth. “Contraction in credit has achieved the purpose of controlling inflation but we should ensure that growth is not impacted,” Nath told reporters. He said the government would not yet revise downward the target of achieving a 12 per cent increase in manufacturing output or the export milestone of $160 billion in 2007-08 despite the setback in growth. “July and August are difficult months and we will take a review in November,” he said. Growth in exports has also slowed down in the first few months of the current fiscal as exporters saw their margins dip on account of rising rupee. Nath said the dip in industrial growth has come largely in consumer and consumer durables sectors which are largely influenced by availability of credit. “I am not much concerned because the slowdown is not because of any structural reason,” he said.