Finance Minister Arun Jaitley hailed the decision of RBI to cut the interest rate, saying it is positive for the Indian economy and will certainly help in reviving the investment cycle the government is trying to restore.
Finance Minister Arun Jaitley hailed the decision of RBI to cut the interest rate, saying it is positive for the Indian economy and will certainly help in reviving the investment cycle the government is trying to restore.
The Ministry of Finance, in a statement, said, "The 25 basis point Report Rate cut announced by the Reserve Bank of India (RBI) is a welcome move and consistent with strong and ongoing disinflationary trends identified in the Ministry’s Mid Year Economy Analysis presented to the Parliament last month." The Ministry stated that this is a significant move in signaling a shift in stance and direction for policy going forward, as the RBI’s statement has noted.
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"This move will provide a fillip to the economy directly by increasing the private sector’s ability and willingness to spend. It should also help indirectly by improving balance sheet of the Corporate Sector and banks, facilitating an increase in the demand for and supply of credit," The finance ministry said.
The Ministry further states that along with other policy actions already taken by the Government and other that are under its consideration, this move represents one more step towards reviving investment and realizing India’s medium term growth potential.
"The RBI decision to cut the interest rate will lead to more money in the hands of the consumer for greater spending. It is positive for the Indian economy and it will certainly help in reviving the investment cycle the government is trying to restore," said Jaitley who has been nudging the central bank to ease the interest rate to lower the cost of capital.
Also Read: How does RBI's rate cut impact you?
Microsec Capital, in a report dated January 15, 2015, said, "Its a welcome move. 25 basis points rate cut not majorly a game changer but its a clear signaled of further easing going forward, as RBI clearly stated in its fifth bi-monthly monetary policy statement that once the monetary policy stance shifts, subsequent policy actions will be consistent with this stance."
The Ministry further states that along with other policy actions already taken by the Government and other that are under its consideration, this move represents one more step towards reviving investment and realizing India’s medium term growth potential.
The stock markets as well cheered the move as the Sensex regained 28,000-mark and the Nifty surged over 200 points.
Also Read: Sensex regains 28K-mark, Nifty surges 206 points on RBI rate cut
(With Agencies)
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