Commerce Minister Anand Sharma hopeful of rate cut
Commerce & Industry Minister Anand Sharma has expressed hope that the Reserve Bank of India (RBI) will cut interest rates to boost growth in its upcoming policy review.
Mr. Sharma said he was hopeful that declining inflation would be taken into account by the central bank in next monetary policy review that is scheduled to take place on April 1, 2014.
When asked whether the central bank would cut interest rates in view of declining inflation, he said, "We hope they will factor this in."
On January 28, the RBI hiked the repo rate from 7.75 per cent to 8 per cent, citing high inflation. But, the wholesale price index (WPI)-based annual rate of inflation slipped to 4.68 per cent in February. It was the time in nine months that the inflation fell below the 5 per cent-mark.
Rate of retail inflation slipped to its 25-month low of 8.1 per cent in February, thanks to drastic fall in food prices, particularly prices of onion and potato.
The India economy grew at a rate of just 4.5 per cent in FY2012-13, the lowest in the last ten years. In the current financial year, the third largest Asian economy is expected to grow at an estimated rate of 4.9 per cent.
India Inc has long been urging the government to cut key interest rates so that the economy could get rid of persistent sluggishness.