New Delhi, Mar 10, 2008. When finance minister Mr. P Chidambaram has decided for decreasing home loan rates for the loan of less than Rs. twenty lakhs, many other sectors facing the heat of rising interest rates.
In addition housing, various other sectors that are showing a slackening rate of growth. According to the Economic Survey 2007-08, except electricity, trade, transport and communication, rest all other sectors growths have slowed down.
High interest rates have increased the cost of production and reduced the demand for consumer goods, resulting in lower growth for the manufacturing sector in the coming fiscal. Construction activity has also been projected to moderate to 9.6 percent, against 12 percent on the back of lesser demand for homes and other projects.
The annual growth in home loans towards the end of November 2007 had dropped to 15 percent from 33 percent a year ago. While demand for home loans have slowed down, commercial real estate is still going strong.
