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FinMin to meet PM Modi to pitch for an interest rate cut

Finance Ministry's decision to meet Modi comes as the MPC has kept rates unchanged for the fourth time consecutively while the GDP growth rate dropped to a six-year low of 6.1 percent in the last quarter.

June 09, 2017 / 04:50 PM IST
The central bank even issued a dissent note to the public on the government’s proposal to set up a Payments Regulatory Board. (Image: Reuters)

The central bank even issued a dissent note to the public on the government’s proposal to set up a Payments Regulatory Board. (Image: Reuters)

Moneycontrol News 

After the Monetary Policy Committee (MPC) decided to keep the repo rate unchanged, the Finance Ministry is likely to meet Prime Minister Narendra Modi to discuss the need to cut interest rates to boost economic growth in India.

According to a report in the Business Standard today, the meeting will be held once PM Modi returns to India. A presentation on inflation and growth will be made to highlight the requirement of a rate cut.

Finance Ministry's decision to meet Modi comes as the MPC has kept rates unchanged for the fourth time consecutively while the GDP growth rate dropped to a six-year low of 6.1 percent in the last quarter.

The MPC committee had declined a meeting with the Finance Ministry officials prior to the policy meet.

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After the rate meeting on Wednesday, Chief Economic Advisor Arvind Subramaniam said a monetary policy easing is necessary, given the current economic conditions in India.

The report confirmed that Subramaniam's statements had the support of Finance Minister Arun Jaitley and the Prime Minister's Office.

Despite an ordinance cleared by the Cabinet and the President which endows the Central bank with the power to directly intervene in NPA issues, the RBI is said to have not fully acted upon the menace.

The government is also unhappy as RBI delayed filing a report on the returns of demonetisation.
first published: Jun 9, 2017 04:50 pm

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