Enthused by a 17% increase in credit offtake and the resultant economic boom, the Economic Survey 2005-06 today asked the government to maintain a check on interest rates, saying high demand, coupled with uncertain prospect of inflation and surging global oil prices, could exert pressure on them.The pressure on interest rates makes a case for release of the required liquidity by the Reserve Bank through the market stabilisation scheme, the Survey said while complimenting the authorities for timely steps to keep liquidity under check during the current fiscal.The Survey said uncertainty regarding inflation due to volatile global oil prices and continued firming up of global interest rates beyond a point poses the risk of dampening the domestic investment boom.The upbeat growth trend of 8.1% in the first half of 2005-06 has been reflected in a steady increase of 17.5% in net domestic credit from the banking system from Rs 19,84,330 crore on January 21, 2005 to Rs 23,32,326 crore on January 20, 2006, the Survey said.
