Corporate India on Tuesday said it could live with interest rates unchanged by RBI, though the real estate and textiles sectors were clearly disappointed that rates had not come down.

A dipstick survey of companies by FE spanning the manufacturing and services sectors show they are pinning greater faith on government spending to improve top lines, rather than policy rates to keep their bottom lines strong. This is because in the current financial year up to June, aggregate credit flow to the commercial sector dwindled to just Rs 5,697 crore, compared with Rs 30,631 crore in the same period of 2008-09--a massive 81% decline, according to RBI data.

However, Niranjan Hiranandani of the eponymous Hiranandani Constructions said, "Due to the unchanged policy, the cost of property construction is expected to increase, leading to lower supply of properties. This will ultimately increase real estate prices in the long term." He further added that any concession is beneficial in today's difficult times. Shree Cement Ltd CMD HM Bangur said, "I think there will be adequate finance available in the system for growth and, hence, it is positive."

RBI data shows that as on May 22, while bank credit to the real estate sector has risen 52% over that of last year, growth in credit for housing has dipped sharply to just 5%.

Echoing the feeling of relief that RBI had not increased rates, Ispat Industries (NIPPONDEN.NS : 0 0) executive director (finance) Anil Surekha said, "As long as rates are unchanged, it's always good. I think this indicates that the government will not allow banks to increase interest rates. This comes as a good sign for industry as a whole." "No change is always good," echoed Grasim president and deputy CFO Sanjeev Bafna.

Until April, the slowdown had caused a drastic fall in domestic as well as international demand, with international prices falling between 15%-40% for various categories of steel. However, following the stimulus package announced by the gov-ernment, and with the higher spend on infrastructure, the sector has seen a recovery.

The sectoral flow of credit from banks to industry slipped to 21.2% by May 22, compared with 27.1% in 2008-09. Overall credit to all sectors declined to 17.6%, against 24.2% year on year.