Industry across different sectors said the 50 basis points increase in the key interest rates was more than expected and would hurt the investment sentiment, resulting in supply constraints.
"With 11 consecutive interest rate increases in the last 15 months, RBI has emerged as the most aggressive central bank which is tasked with containing inflation," industry chamber Confederation of Indian Industry said.
It said at a time when there were indications of a clear slowdown in industrial and economic output, "this is a matter of great concern, since there could be a tipping point beyond which salvaging a downward spiral of growth could be an arduous task."
Federation of Indian Chambers of Commerce and Industry, too, expressed 'major disappointment' with the rate hike, stating that the RBI has decided to sacrifice growth.
"In the trade off between growth and inflation, the RBI has clearly decided to sacrifice economic growth," Ficci said.
The exporting community pointed out that the interest rates for exporters have gone up by more than 71 per cent since March, 2010, if the withdrawal of 2
There's no magic wand to bring down inflation: RBI
FIEO head presents proposals
Committed to UK-India strategic relations: Cable
'Changes in banking norms a must'
Inflation at 5-6% ideal for India: Pranab