WHEN Hindustan Construction Ltd. was building a bridge in 2008 to transform the congested commute in Mumbai, its stock was at a record high because low interest rates had sparked a construction boom.

    Today, like many small- and mid-sized Indian firms, Hindustan Construction is struggling, after a borrowing binge that saw its debt surge from US$674 million in fiscal year 2007/2008 to US$1.6 billion in 2014/15, according to Thomson Reuters data.

    Companies are still struggling to recover from those years of exuberance, and say that Reserve Bank of India (RBI) Governor Raghuram Rajan’s caution in cutting rates despite historically low inflation is making it harder for them to get back on track.

    Having cut India’s main lending rate by three-quarters of a percentage point to 7.25 percent this year, the RBI kept it unchanged at its policy review Tuesday, though market watchers predict one more cut by the end of the year.

    For many bosses, that is not enough.

    “I’m disappointed with the RBI,” said Praveen Sood, chief financial officer of the group. “I just don’t know if they care enough about the industrial sector.”

    The growing discontent comes as wholesale inflation has declined for eight consecutive months, while consumer inflation remains far from the double-digit levels less than two years ago and within the RBI’s target of 2 to 6 percent.

    At the same time, the Indian economy is widely seen as weak, with much scepticism over official data in May which showed its growth overtook China’s.

    Corporate profits are hurting. An analysis of 70 firms with a market capitalization of at least US$100 million showed net income fell by 5 percent in April-June, the second straight quarterly decline, according to Thomson Reuters data.

    (SD-Agencies)