Prime Minister Manmohan Singh on March 28 said there is scope for further interest rates cuts. He assured the industry that the credit needs would be met to enable the economy to deal with the global economic crisis. "With ample liquidity and low inflation, there is scope perhaps for a further moderation in interest rates. Domestic credit flow for productive needs has to be definitely maintained at reasonable cost", Singh said in his meeting with industry leaders here.
The Prime Minister said, "There are signs of improvement in sectors like steel and cement...The rural demands for goods and services appears quite robust and the outlook in the agriculture sector gives room for optimism". He said the disbursing of credit by the public sector banks was more in the current fiscal than in 2007-08. While on the other hand, the lending by private sector and foreign banks was reduced to one-third to one-fourth of that a year ago. To tackle a regime of low inflation and demand uncertainties across some sectors of the real economy, to ensure that the financial sector remains healthy and supportive, to husband foreign exchange reserve responsibly, to sustain a high level of expenditure bearing in mind the need for fiscal discipline.. are challenges that we confront, Singh said.
RBI governor D Subbarao, who was also present in the meeting on Thursday stated that further stimulus package would have a cost in the form of more borrowing requirements of the government.
The Prime Minister also sought views of the corporate honchos on India''s stand at the G-20 Summit on April 2. The Prime Minister said the world looks at India "with respect and hope: respect for our calibrated reforms which has resulted in growth with justice and hope that India would be an engine of growth for the world economy".
The Prime Minister said, "There are signs of improvement in sectors like steel and cement...The rural demands for goods and services appears quite robust and the outlook in the agriculture sector gives room for optimism". He said the disbursing of credit by the public sector banks was more in the current fiscal than in 2007-08. While on the other hand, the lending by private sector and foreign banks was reduced to one-third to one-fourth of that a year ago. To tackle a regime of low inflation and demand uncertainties across some sectors of the real economy, to ensure that the financial sector remains healthy and supportive, to husband foreign exchange reserve responsibly, to sustain a high level of expenditure bearing in mind the need for fiscal discipline.. are challenges that we confront, Singh said.
RBI governor D Subbarao, who was also present in the meeting on Thursday stated that further stimulus package would have a cost in the form of more borrowing requirements of the government.
The Prime Minister also sought views of the corporate honchos on India''s stand at the G-20 Summit on April 2. The Prime Minister said the world looks at India "with respect and hope: respect for our calibrated reforms which has resulted in growth with justice and hope that India would be an engine of growth for the world economy".
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