New Delhi : Making a case for lowering of interest rates, Minister of State for Finance Jayant Sinha has said RBI should take into account various factors, including low inflation, while deciding on monetary policy stance. He also stressed on the need to make Indian exports more competitive by bringing down the cost of capital as also the cost of manufacturing.
Stating that the country’s economic “growth is not at its potential”, Sinha said RBI will certainly look into the factors like negative wholesale inflation and low GDP deflator while “establishing its monetary policy”.
The Reserve Bank is scheduled to announce its next bi-monthly monetary policy review for the current fiscal on September 29, amid rate cut calls from the industry to boost growth rate, which fell to 7 per cent in the first quarter of 2015-16.
“If you look at wholesale price index (WPI) inflation and GDP deflator, they are near zero or negative… CPI continues to be in the 5-6 per cent range.” So, how one takes into account all these data to decide what the inflationary expectations are and how to best anchor inflationary expectations, that is the job of RBI,” Sinha told PTI in an interview.
