Will rein in fiscal deficit, says Montek

The Reserve Bank of India’s decision to cut short term lending rate by 50 basis points is a signal that the economy is ready to be given a stimulus without any danger on the inflation front, Planning Commission Deputy Chairman Montek Singh Ahluwalia said.

Speaking to reporters on the sidelines of a function, he said RBI reducing lending rates along with government efforts to bring down fiscal deficit should boost economic growth this year.

“Given the emphasis being given on making sure that the economy rebounds and also the fact that inflation had come down, I am glad the RBI Governor has lowered the interest rates. I think it is a good signal and a good way to start the (financial) year”, Ahluwalia said.