Chidambaram hints at rates cut in next RBI review
18 Sep 2012
Finance minister Palaniappan Chidambaram on Monday strongly hinted that the Reserve Bank of India would cut interest rates in its next policy review on 30 October.
''The response of the RBI on 30 October will be greatly supportive of growth,'' Chidambaram told newspersons.
On the cut in cash reserve ratio effected by RBI governor Duruvvi Subbarao on Monday by 0.25 per cent, he said it was a ''small but welcome'' step.
''Like others, I am not disappointed (with the RBI action). There is a regular review due on 30 October, which is only six weeks away,'' he said.
Later, in a television programme, Chidambaram sought to clarify that he was not seeking to pressure the central bank into lowering rates. ''The RBI is not supposed to toe the government's line, and the government has never asked the RBI to toe its line,'' he said.
On curtailing runaway government expenditure and augmenting resources, he said, ''There are a number of ways in which this can be done. For example, service tax registrees are 2.5 times those who actually pay. This can be enlarged,'' Chidambaram said without elaborating.
