Reserve Bank of India (RBI) Governor Raghuram Rajan today said the central bank is working on the contours of the scheme that will provide lower interest rates (cheap loans) to buyers of consumer goods.
"I just want to emphasise that discussion is taking place on what can be done. Something will be announced as and when the scheme will be put together," he said while addressing a press conference after the Reserve Bank board meeting.
On Thursday, after a long meeting of Finance Minister P Chidambaram with Raghuram Rajan and Economic Affairs Secretary Arvind Mayaram it was announced that PSU banks would be provided additional capital infusion over and above Rs 14,000 crore announced in the Budget, 2013-14.
"This (capital infusion) amount will be enhanced sufficiently. The additional amount of capital will be provided to banks to enable them to lend to borrowers in selected sector such as two-wheeler, consumer durables, etc at lower rates in order to stimulate demand," a Finance Ministry statement had said.
The decision is aimed at stimulating demand for consumer goods and promoting growth rate which had slipped to decade's low of 5 per cent in 2012-13. In the first quarter of the current fiscal, it was 4.4 per cent.
Chidambaram had also said that he would meet heads of PSU banks soon to impress upon them the need to lower interest rates for select sectors.
As per the latest industrial output data, the output of the consumer durables sector declined by 9.3 per cent in July, compared to growth of 0.8 per cent in the same month last year. The segment saw 12 per cent decline in output during April-July compared with growth of 6.1 per cent.
Consumer durables, a reflection of demand for manufactured products, include TVs, fridges, washing machines.
Besides, two-wheeler sales recorded a flat growth rate of 0.72 per cent in April-August period current fiscal, as against a growth of 6.8 per cent in the corresponding period last year.
Raghuram Rajan defends report on states, says it will encourage growth
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