Interest Cost and Rate of Profit in Indian Corporate Sector

in Indian Corporate Sector K A Menon Study of the behaviour of the average rate of interest or the share of interest cost in the value of production and value added, though important in itself, does not provide conclusive evidence of the nature of the interest burden borne by industries. This paper seeks to assess the interest burden on the corporate sector against the accepted norm of marginal efficiency of capital. Data for the study are taken from the analyses of the finances of non-financial companies periodically conducted by the Reserve Bank of India and the ICICI.