Interest Rate Cut: The pressure on the Reserve Bank of India (RBI) to reduce interest rates has started increasing. Finance Minister Nirmala Sitharaman has advised banks to keep the interest rates on loans affordable. According to the Finance Minister, most people believe that borrowing has become very expensive. According to the Finance Minister, to achieve the goal of Viksit Bharat, it is necessary that the interest rates on loans remain affordable so that business can be expanded and the goal of investment in new places can be achieved.
Appeal to banks to reduce interest rates
Addressing the SBI Banking and Economics Conclave, he said, at present high interest rates on loans are creating problems for business. The Finance Minister has appealed to the banks to reduce the interest rates and asked them to make it affordable. Finance Minister Sitharaman has appealed for more discussion on how to use interest rates to control food inflation. The Finance Minister said that to control food inflation, the government is continuously working to resolve supply-related issues.
Food inflation supply chain problem!
The Finance Minister said that there is inflationary pressure due to the prices of tomatoes, onions and potatoes. Whereas the inflation rate of other things is low. The Finance Minister said, I do not want to be a part of the discussion whether these perishable food items should be included in the index measuring inflation or not or it is only a supply chain problem. Actually, Nirmala Sitharaman is not the first minister of Modi government who has advised to reduce interest rates. Only last week, Commerce Minister Piyush Goyal has asked the Reserve Bank of India to consider cutting interest rates. The Commerce Minister also raised questions on RBI’s policy of excessive dependence on food inflation for monetary policy decisions.
RBI Governor and Union Ministers have different opinions!
However, Reserve Bank of India Governor Shaktikanta Das has a different opinion. The RBI Governor has made it clear that talking about reducing inflation by removing the prices of vegetables and food items from the Consumer Price Index will not be fair to the common people. In his statement in August 2024, he said, we need to think from the perspective of the people who have to spend 50 percent of their income on food items. He said, the public will definitely be forced to think that with so much salary, so much has to be spent on food items, then how come the government and RBI are saying that inflation is coming down?
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