Since corporate India is quite comfortably placed as it is sitting on huge amounts of cash, and still has a pretty low interest burden in relative terms, the string of interest rate hikes by the RBI will take some time to bite. In the late 1990s and the earlier part of this decade, the interest payout in relation to EBIT was around 34 per cent while that last year was a mere 11.3 per cent "" so, there is plenty of headroom here, according to data got from Surjit S Bhalla's Mid-year Review of the Economy 2006-07. The problem, however, could emerge from the demand side as customers reduce expenditure in response to rising EMIs, for instance.
