RBI Interest Rate Cut: Union Commerce Minister Piyush Goyal has asked the Reserve Bank of India to consider cutting interest rates. The Union Minister also raised questions on the policy of the Central Bank regarding excessive dependence of RBI on food inflation for monetary policy decisions. Keeping in mind the volatile food inflation, he has termed the decision regarding base rate as a useless principle. However, he clarified that this is his personal opinion and not the official stand of the government.
Piyush Goyal was addressing the CNBC-TV18 Global Leadership Summit. He expressed confidence that inflation will come down by December. He told that during the tenure of Modi government, inflation has been the lowest since independence. In the summit, Piyush Goyal raised questions on the dependence on food inflation in RBI’s monetary policy decisions, but let us tell you that Reserve Bank of India Governor Shaktikanta Das has a different stance.
In August 2024, the RBI Governor said in an interview that if we say that inflation has reduced by taking out the prices of vegetables and food items in the Consumer Price Index, then it will not be right at all from the public’s point of view. 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, this question will come in the minds of the public that our salary is this much and we have to spend so much on food items, then how come the government and RBI are saying that inflation is coming down? RBI Governor said, food items are a very important component of our headline inflation target. The share of food inflation in our consumption basket is 46 percent.
The Commerce Minister expressed concern over the selling of foreign investors in the Indian stock market. He asked investors to adopt a long-term investment perspective instead of the fluctuations that occur every quarter. Despite short-term challenges, he said India’s economic fundamentals remain strong.
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