Room for rate cut as inflation moderating: Mayaram

The Secretary also said the government was "not looking" at selling its stake in either L&T or ITC held through SUUTI at this point of time.

January 22, 2014 / 20:01 IST

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Ahead of RBI's monetary policy meet, Economic Affairs Secretary Arvind Mayaram today said signs of moderation in inflation have strengthened the case for a cut in interest rates to boost economic growth. "I don't think there is a case for rate hike at all at this point of time. If the RBI is comfortable at the manner at which the inflation is coming out, they may consider it (rate cut)...

"And I also believe that there is now a very strong case for incentivising growth...because we now need to move out of this trough, specially considering the fact that employment is also suffering, investments have been sluggish...," Mayaram said.

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The Secretary is here to attend the annual World Economic Forum (WEF) meeting at this Alpine ski resort town. Wholesale inflation declined to a five-month low of 6.16 percent in December, while the consumer price index (CPI) based inflation declined to three month low of 9.87 percent. The data raised hopes that the RBI will lower interest rates in its third quarter monetary policy review on January 28.

To a query on government's share sale in Hindustan Zinc Limited (HZL) and BALCO, Mayaram said stake sales must happen before March 31, the last day of current financial year. "...as soon as we go back, we are going to draw a roadmap and I do believe that in the next two months you will see that it will be completed," he said.