Time for RBI to cut interest rates: Anand Mahindra

Cutting interest rates will boost the growth of Indian economy

Update: 2014-11-05 11:15 GMT
RBI cuts statutory liquidity ratio to 22 per cent of deposits from August 9; Picture for representational purpose (Photo: DC archives)

New Delhi: Stating that the economy has started improving, Mahindra Group Chairman and Managing   Director Anand Mahindra today said the RBI should consider cutting interest rates to boost growth.   "It might be time for the RBI to think of a rate cut," Mahindra said here on the sidelines of the India Economic   Summit.   He added that in the past the central bank hasn't been   able to bring down the rates due to high inflation."The need of the hour has changed and its time to start   to look to support growth," Mahindra said.  

The inflation measured in terms of Wholesale Price Index   (WPI) touched a five year low of 2.38 per cent in September. Besides, retail inflation has also dropped to 6.46 per cent,   the lowest since the new series of Consumer Price Index was   released in January 2012. 

Mahindra also said that with a new government taking charge, not only have the sentiments improved but the economy has also started showing signs of growth on the back of   various steps taken by the Narendra Modi-led regime.  

"This (Indian economy) is a large flywheel. It is not a   jump start, it takes a while to gain momentum. I see signs   that the flywheel is beginning to move," he said.   Highlighting the significance of "little dose of reforms" undertaken by the new government and how it would eventually add up to "big bang reforms", Mahindra said: "By the first   quarter of the next fiscal, you'd see palpable signs of   growth."   While appreciating the steps taken by the new government such as extending the excise duty cut, he said it is time to   bring down taxes in the auto industry.    

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