Views against increasing interest rates

Critics feel that overemphasis on combating inflation sometimes comes at the cost of economic growth. They also argue that increasing interest rates without any thought in the monetary policy does not help. High interest rates have been identified, by many, as a major barrier to boosting growth. Many times entrepreneurs hold on to their investment plans pending any relaxation in monetary policy by the RBI. Industry representatives on the other hand feel that industrial growth is severely impacted by high cost of funds and other structural rigidities in the economic system like poor infrastructure and high transaction costs