Time is ripe for Reserve Bank to lower rates, says FM Arun Jaitley

“My views are well-known. It is (the time),” he said, when asked if the Reserve Bank of India should lower rates.

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His comments come just days before the Reserve Bank of India’s monetary policy on June 2. While the central bank has lowered its policy rate twice so far in 2015, it maintained status quo at the recent policy meet on April 7 in the wake of unseasonal rains impacting food prices.

Addressing a press conference on completion of one year of the NDA government, the finance minister also said the government is in talks with the Central bank for setting up the proposed Public Debt Management Agency and said that the government is also working on a competitive tax regime for corporates that would include a lower corporate tax rate while weeding out exemptions.

“High taxation rates are never investor or economy friendly … We are trying to end the adversity between the revenue (department) and the assessee,” he stressed.

Consumer price inflation eased to a four month low of 4.87 per cent in April while industrial output slowed to a 5-month low of 2.1 per cent in March.

Meanwhile, affirming the government’s commitment to going ahead with economic reforms, Jaitley said, “We are in the business of governance, our plate is full for the next three years with the reform agenda.”

Apart from the passage of the Land Bill and the Constitutional Amendment Bill for the roll out of the goods and services tax (GST), the minister listed a number of measures that the government intends to take over the next year that include re-starting of stalled projects, port corporatisation, passage of the Public Procurement Bill, bankruptcy code, resolution of disputes in large public contracts as well as easing of business rules over at entry points.

Stressing that India is poised for double-digit growth, he said that the government will continue with its reform measures for this and said that it will also continue its policy of quick decision making. He, however, blamed the principal Opposition party for obstructing such moves that would “delay the journey to 10 per cent” growth he said.

Jaitley also expressed satisfaction over key macro-economic parameters, hoping that bad loans of banks would soon come down.

Noting that gross non-performing assets of banks had come down to 5.2 per cent in the quarter ended March, 2015, he said, “I would take it (drop in March quarter NPAs) only as an initial indicator …”If this pattern continues over two-three-four quarters, then I will draw a conclusion that there is a pattern. I am keeping my fingers crossed.”

Meanwhile, the minister also said that the government would go ahead with both strategic disinvestment as well as sale of minority stakes in public sector units, adding that proposals worth Rs 50,000 crore are already with the department of disinvestment.