HSBC India country head Naina Lal Kidwai has said the Reserve Bank of India needs to desist from hiking interest rates as growth has slumped to below potential.
"I do think that we need a pause in interest rates.
"Growth (situation) is scary," Kidwai said at a CNBC TV18 awards function here last evening.
In the mid-quarter monetary policy review last month, RBI Governor Raghuram Rajan had left the key policy rate unchanged, after raising it 50 bps in two instalments since he took over on September 4, saying he was waiting for more data clarity.
"The message to the industry is quite important to make sure that we can get interest rates to at least plateau if not come down," Kidwai said.
The former president of industry body Federation of Indian Chambers of Commerce and Industry said she would like to at least see the upward movement of interest rates halted and in time to actually come down.
Kidwai said although inflation has started softening, more efforts are needed to bring structural changes which could keep inflation in comfortable zone.
"I think we need to do a lot more, particularly in terms of food inflation, we need to see a lot of structural change. Some of these announcements around APMC and logistics and food are very important," she said.
Consumer price inflation eased to three-month low of 9.87 per cent in December from 11.24 per cent in November.
Kidwai expressed the hope that 2014 will be a better year. "I am certainly of this school that believes 2014 could not be worst from where we were last year."