1. Arun Jaitley pushes for rate cut, hopes RBI will take note of low inflation, oil prices

Arun Jaitley pushes for rate cut, hopes RBI will take note of low inflation, oil prices

Finance Minister Arun Jaitley said inflation is under control while oil and commodity prices are also low and expressed hope that RBI will consider all these factors in its monetary policy review.

By: | New Delhi | Published: August 31, 2015 1:40 PM
arun jaitley

Finance Minister Arun Jaitley said in a scenario where inflation is under control, the quantum of interest rate cut is the prerogative of the RBI. (PTI)

Pushing for interest rate cut, Finance Minister Arun Jaitley on Monday said inflation is under control while oil and commodity prices are also low and expressed hope that RBI will consider all these factors in its monetary policy review.

“Inflation in India is broadly under control and you have low oil prices, you have low commodity prices.

“Though August and September are not going to be very exciting from the point of view of monsoon, at least July was a very good month for monsoon. So production in agriculture is going to be significantly better than the last year and therefore I don’t think food prices will rise very much either,” he said.

In a scenario where inflation is under control, the quantum of interest rate cut is “the prerogative of the RBI”, he said.

“And therefore I do see RBI as a very professional institution which will certainly take note of all these factors when it decides its next stand,” he told a business channel.

Asked if RBI has shown “little stubbornness” on monetary policy stance so far, Jaitley said, “People can have different views. But when an institution like Reserve Bank with all its professionalism and capacities is empowered, we must learn to trust them a bit.”

The Finance Minister said oil and commodity prices have seen global slump and India is a net importer of these.

“Therefore we are buying products at cheaper price… We are the beneficiaries of slowdown in the oil prices and the commodity prices. We are not part of China’s production chain. We have a huge domestic demand,” he said.

India, he said, offered an attractive investment avenue for investors pulling out their money from other destinations.

Stating that the reform process has to continue, Jaitley said, “Supposing we have the GST through, either by the Centre or by the state we can get our land law little liberalised, we take the necessary monetary policy steps, our private sector investment picks up, of course our ability to move into still higher range of economic growth is there. And that is where the real opportunity lies for India,” he said.

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  1. Davish Bhardwaj
    Aug 31, 2015 at 2:23 pm
    Onion at 70 and tomatoes at 50 , how can he claim that inflation under control. He might be kidding ;)
    Reply
    1. M
      M Kumar
      Aug 31, 2015 at 3:16 pm
      RBI SHOULD BE VERY VERY CAREFUL AND SHOULD NOT COME UNDER PRESSURE OF POLITICAL MASTERS. SENIOR CITIZENS ARE SUFFERING WHO ARE DEPENDING ON ONLY INTEREST EARNED ON THEIR DEPOSITS. WE VOTED NDA BUT EXPECT RBI NOT TO YIELD FALSE VIEWS OF POLITICAL CL. PRICES ARE VERY HIGH.
      Reply
      1. A
        Anon
        Aug 31, 2015 at 3:04 pm
        Why doesnt Ministry of Finance take note of the fact that banks are not transmitting rate cuts from RBI. What is the point of keeping policy rates low and squeezing out savings - they'll agin find their way to unproductive ets then.
        Reply
        1. N
          nvee
          Aug 31, 2015 at 3:07 pm
          Hope RBI takes note of the fact that : 1. Inflation data is retrospective and not current to the situation. Data is therefore suspect and does not reflect ground realities 2. Day-to-day household consumption is still inflated 3. Producers have NOT got the benefit of inflated prices & consumers have not got the benefit of low inflation 4. Banks still have not effectively reflected past rate cuts to consumers..but respond with alacrity when rate increase happens! 5. There seems to be something fishy with low inflation number and still high prices on day-to-day consumption 6. Stop living in Ivory Tower. 7. Definition of Statistics - Lies, Lies & more Lies!
          Reply

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