look news india
Mumbai: The central government has claimed that the tight monetary policy of the Reserve Bank is partly responsible for the weak performance of the country’s economy and said that the economy should improve in the last six months of the current financial year due to rising demand and slowdown. Used to be. of restrictive measures. Credit withdrawals are expected to increase as the Reserve Bank reduces the cash reserve ratio (CRR).
According to the report released by the Department of Economic Affairs of the Finance Ministry, the demand has slowed down due to the monetary policy stance of the Reserve Bank and comprehensive prudent measures. The Reserve Bank has kept the repo rate unchanged for two consecutive years because former RBI Governor Shaktikanta Das wanted to see inflation remain at four per cent for a long time before cutting interest rates.
Finance Minister Nirmala Sitharaman, Commerce Minister Piyush Goyal and several government officials expressed willingness to cut interest rates to support growth. In the September quarter of the current financial year, the economic growth rate reached a seven-quarter low of 5.40 percent.
Following weak data in the September quarter, many rating agencies and analysts have cut their economic growth estimates for the entire current year.
Sanjay Malhotra, who became the new Governor of the Reserve Bank in place of Shaktikanta Das, can cut the repo rate in the monetary policy review meeting in February.
The report said there are many reasons to believe that the growth outlook in the last six months of the current financial year is better than the first six months of the current financial year.
In his last meeting as governor, Das reduced the cash reserve ratio from 4.50 per cent to 4 per cent, which will lead to an increase in credit withdrawals. The economic growth rate for the current financial year is estimated to be 6.50 percent. The report said the increase in vehicle sales in October-November not only indicated an increase in demand at the rural level, but the increase in passenger traffic also indicated an improvement in urban demand.
