Kolkata: Leading economists in India believe that the efforts of the central government to stimulate the economy by bringing down interest rates will not work in the country.
Susheel Khanna, an economist with the Indian Institute of Management, Kolkata, says bringing down interest rates cannot solve the problem of inadequate demand in the economy. The government should step up expenditure and not cut it down.
Noted economist Amiya Bagchi says this situation will bring in an era of dissavings in the economy. A soft interest rate regime will only protect the interests of the financiers collectively defined to represent banks, multinationals and other financial agencies.
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