Fiscal, monetary policy going in tandem, says FM Sitharaman after RBI board meet: Key takeaways

RBI Governor Sanjay Malhotra with Union Finance Minister Nirmala Sitharaman (File Photo: PTI)

Finance Minister Nirmala Sitharaman on Saturday said whether it is growth or inflation, "monetary and fiscal policy going in tandem would benefit the economy".

Sitharaman was addressing a media briefing alongside RBI Governor Sanjay Malhotra a day after the Reserve Bank of India (RBI) announced the repo rate cut during the MPC meet.

Here are the key takeaways:

RBI Governor Sanjay Malhotra

- On being asked whether income tax cut and repo rate cut would boost consumption, RBI Governor Sanjay Malhotra said, "Repo rate cut should help support it."

- "Lot of issues common to various financial regulators. We may look into issues like payments, cyber security to better the systems."

- "RBI has always been focussed on Ease of Credit, but there is room for improvement."

- "There is no change in approach on rupee, we don't target a price level or band for rupee. We only step in when there is excessive volatility. We trust our market's efficiency and depend on them to decide on the level of rupee."

- "We have provided for liquidity, going forward too we will be nimble, agile and watchful of the banking system's requirement on liquidity -- both transient and durable."

- "Alert to all pressures on inflation, will be watchful of any depreciation of rupee that leads to inflation. Most of the rupee's depreciation is due to Trump related tariff announcements and global uncertainties. So hopefully that should settle down and help us with downward movement on rupee."

- "We have a number of instruments to manage liquidity like OMOs, VRRs and we will use them. We need not be worried on that account."

- "We had given a thought of pushing the MPC meetings to the middle of the month because we have more updated inflation data. But due to some commitments, we have not been able to push MPC meetings early in the month and so we will continue to do it in the middle of the month."

- "There is a working group on cryptocurrencies that is looking into this issue. Let's wait for the discussion paper, which is under works."

Finance Minister Nirmala Sitharaman

- "Whether it is growth or inflation, monetary and fiscal policy going in tandem would benefit the economy."

- "There has been good coordination between RBI and government. No one encroaches on the other."

- "Expect that with the new Governor RBI and government will work in a well-coordinated manner, keeping our growth in mind."

- "Cabinet cleared IT bill yesterday, I hope to bring it to Parliament next week, post that it will go to the committee. After all the process is completed, and parliament passes it, then we will decide when it will be rolled out."

- "Industry is seeing signs of possible recovery of consumption, and many of them maybe looking at reviving capacity utilisation. I see it as a positive sign, yesterday with the decision of the RBI, together it can serve as the required traction."

- "Budget custom duty changes was not a knee jerk reaction to any global developments. Budget announcement on custom duty changes has been in the works for the last two years."

- "We will provide tariff protection as required by the industry while focussing on making industry more competitive."