India likely to grow by 7-7.5 per cent in FY10, says Kamath

India likely to grow by 7-7.5 per cent in FY10, says Kamath

ICICI Bank Chairman, K V Kamath

"Manufacturing sector has come back to the stream...Infrastructure, mainly power, is coming back in a big belief is that we will see a growth of 7-7.5 per cent (in the current fiscal)," ICICI Bank, Chairman, K V Kamath told a conference here.

In July this year, Reserve Bank projected atleast six per cent growth in the current fiscal on the back of an expected recovery in the world markets. Kamath said if the weak monsoon pose hurdles to the agriculture output, the growth can moderate upto seven per cent, while it could be high at 7.5 per cent if the monsoon is favourable.

In the last three months, Kamath said, ICICI Bank seen its coprorate clients resuming their projects, which were shelved previously, on account of a sharp slowdown in the financial markets. Key-sectors like oil, cement, auto and services sectors have started recovering from the slowdown, Kamath said.

However, a few other export-oriented sectors, primarily textile, still face challenges, Kamath, who was the Managing Director and CEO of country's second largest bank, said.
Banks have significantly slowed down their unsecured lending to avert rise in loan impairments, he said.

However, loan growth to corporates and home loan consumers have picked up in the recent past and is expected to improve further, Kamath said. The banking system is equipped with sufficient liquidity on account of various meausres from the policy makers and liquidity is unlikely to emerge as a challenge for growth, Kamath said.

On interest rates, Kamath said an upward movement in the rates is unlikely in the immediate future. Noting that badloans emerged as a major concern to global banks, Kamath said that some amount of "cleaning up" is yet to be done on the "credit side of business and property side of business" globally.