Money on the markets

A maturing market amid the mayhem

Rate hike could hit SME sector



The small and medium enterprises (SME) sector, which accounts for almost 45 percent of India’s manufacturing output and 40 percent of its exports, is hoping the Reserve Bank of India (RBI) will keep its key rates unchanged in its policy review on January 29.

Last year had been shaky for the SME sector, but with the course of time and government intervention it regained its foothold in the market.

“If there is an interest rate hike now, it will have an adverse effect on the productivity of the SME sector,” Salil Singhal, chairman of CII’s MSME Council, told Reuters.

Interest rates in India are still very high in comparison to international rates, he added.