Sharma asks RBI to cut interest rates to boost economy

Published: 05th June 2012 06:12 PM  |   Last Updated: 16th October 2012 11:53 AM   |  A+A-


Upset over "disturbing" decline in industrial growth, India's Commerce and Industry Minister Anand Sharma Tuesday made a case for the Reserve Bank to cut interest rates in its forthcoming credit policy review.

"I would urge them (RBI) to look at the present depressed investment climate and the disturbing numbers of fall in manufacturing core sectors and IIP (Index of Industrial Production) numbers.

"Therefore, these numbers have to change upwards in a shortest possible time, that would also positively reflect in the GDP growth," he told newspersons here.

Sharma said while it is a difficult job for the central bank to have a balance between growth and inflation, "at the same time economic activity has to continue. These are the lessons learnt from other countries experiences.. people need employment... We are focusing on job creation".

The country's Gross Domestic Product (GDP) growth touched a nine-year low of 5.3 per cent in the last quarter of the previous fiscal, which ended with 6.5 per cent expansion.

The industrial growth shrank to 3.5 per cent in March.

The RBI is set to review the credit policy on June 18.

Asked about over 20 per cent depreciation in rupee against the US dollar, Sharma said, the Commerce Ministry is in regular touch with the Finance Ministry and the RBI.

"We are constantly talking to Finance Ministry and the Reserve Bank. We are for stable rupee...we hope current situation won't last for long... we will be able to lift the investment sentiment," he said.

Sharma said so far as the exports are concerned, while the growth numbers would vary, "We are working on a plan to turn around the situation by autumn (September-November)". After all, India did manage a reversal of the trend from a huge 39 per cent deceleration of exports in May 2009, he said.


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