Bangalore: The lower rate of economic growth in India has pushed the Reserve Bank of India and the Central Government to take mandatory measures for boosting up the financial health of the nation. RBI has cut down the Cash Reserve Ratio (CRR), repo and also the reverse repo by 25 basis points. This will cut down the cost of loans for home, auto and in other fields.
One of the senior Adani Power official said that “The repo rate cut will also bring down the interest rate. If inflation falls and RBI does a redux it will give the right fillip to the economy”
The market still expects something more from the government. Mr. Anand Rathi, a Senior Analyst said that the market expects another reduction of 50 basis points by June 2013 and at least a total of 100 basis points in 2013. Most of the experts are now expecting a better result in the upcoming Union budget. The auto sector was also seen to be satisfied with the recent decision by the RBI and the Central Government. Manufactures like Mahindra, Fiat and others has said that the decrease in the interest rate will offer an open choice to the auto consumers.
Mr. Chandrajit Banerjee, Director general of Confederation of Indian Industry (CII) said to ‘My digitalfc’: “RBI’s decision to ease the monetary policy sends out a positive signal that the central bank has now joined hands with the government to revive the growth momentum of the economy, which had to so far largely focused on containing inflation. Government’s continued thrust on reforms along with the downtrend in WPI-based inflation has provided necessary legroom for RBI to maneuver its policy in favour of growth. However, CII would have been happier with a larger reduction in repo rate”.
India Inc is extremely hopeful on the combined decision of RBI and the Central Government. This decision will bring life to the starving economic growth of the nation.