High rates choking investments; need about 9% growth: CII

India needs to get back to 8-9 percent economic growth by attracting investments that have been choked by the high interest regime, CII said on Monday.

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"Rising interest rates are counter-productive and they discourage investments," CII president S Gopalakrishnan said "The RBI has done a very good job in containing volatility with its monetary controls. But for long term economic growth the interest rates are too high," he said.

For that, the CRR should be cut by 100bps and repo rates by 75bps, he said, adding that inflation is a cause for concern owing to supply side constraints. Gopalakrishnan said the GDP growth during 2012-13 had hit a decadal low of 5 percent.

"Growth in the next few years is likely to be muted. We need to go back to the eight to 9-percent GDP growth for which investments are necessary as there is a sense of urgency," the CII president said.

He added that the implementation of the Goods and Services Tax (GST) itself will add 1.5 percent to the GDP straightaway. CII also advocated land and power sector reforms, and a big push to infrastructure development.