Mumbai, Oct 30 (ANI): The Reserve Bank of India is all set to cut interest rate despite high inflation in order to support growth in the half- yearly review of monetary policy which will be unveiled today.
The RBI said the Survey of Professional Forecasters has lowered the GDP growth projection to 5.7 per cent from 6.5 per cent for the current fiscal.
Average wholesale price based inflation forecast is revised upwards to 7.7 per cent from 7.3 per cent.
It said the global growth prospects, both in advanced and emerging economies, have weakened and the euro zone troubles have affected business confidence and caused deceleration in global trade.
It said sustaining the reform initiatives of the government would be the precursor for a turnaround in economic activity.
Earlier on Monday, Finance Minister P Chidambaram had unveiled a five-year road map for fiscal consolidation to promote investments, contain inflation and reduce fiscal deficit to about three percent to take India onto the high growth trajectory.
Chidamabaram said that the government will continue its efforts to restrict fiscal deficit in the current financial year to 5.3 percent of the Gross Domestic Product (GDP) and reduce it to three percent by 2016-17.
The fiscal deficit was 5.8 percent in 2011-12.
Economic growth slipped to nine-year low of 6.5 percent in 2011-12 and it is expected to fall further this fiscal.
Referring to fiscal consolidation in 2012-13, Chidambaram expressed the confidence that government would be able to raise Rs 30,000 crore from disinvestment and Rs. 40,000 crore from sale of spectrum. (ANI)
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