Exuding confidence of clocking over 6 per cent growth this fiscal,Economic Affairs Secretary Arvind Mayaram today said inflation will cool further helping the Reserve Bank to continue with an easy policy regime.
“We would be happy if the RBI continues the trend of softening the rates. To what extent,we’d leave it to the wisdom of the RBI. We do believe that there’s a case for continuing with the easing,” Mayaram told reporters on the sidelines of a Ficci event here.
The call for rate cut comes ahead of the annual monetary policy announcement scheduled for Friday,wherein it is widely expected that the apex bank will cut lending rates by 0.25 per cent as inflationary pressures have eased much more than its projected levels.
“We believe in the current year,we will grow at over 6 per cent,in the next year 7-7.5 per cent and year after that we are quite confident that the economy will go back to its potential growth rate of 8 per cent,” said Mayaram.
However,the World Bank today scaled down its GDP forecast to 6.1 per cent for this fiscal,from a high of seven per cent it had projected a few months back.
He said headline inflation,which had come in at a three year low of 5.96 per cent in March,will ease further from here on because of an expected “bumper” rabi (winter crop) harvest wherein food grain output will increase to over 250 million tonnes.
The Met Office estimate of a normal monsoon for the year will also help ease inflation,the top finance ministry official said.
It can be noted that the headline inflation number has been a major worry which resulted in RBI hiking and then holding on to its elevated interest rate stance,before
showing signs of easing in the latter part of the past fiscal to support sagging growth,which is estimated to come at the decade’s low of 5 per cent.