Interest rates should be reduced further: Kamal Nath

February 10th, 2009 - 4:47 pm ICT by IANS  

New Delhi, Feb 10 (IANS) Interest rates for the Indian corporate sector were still “very high” and must be reduced, Commerce Minister Kamal Nath said here Tuesday.

“This is under the domain of the RBI (Reserve Bank of India) but my own view is that interest rates are very high and the interest rate should be reduced,” Kamal Nath told reporters ahead of the interim budget Feb 16.

“It should be in lieu with global interest rates,” the commerce minister said.

When asked whether there will be any further stimulus packages for the export and manufacturing sectors, he said the government is committed to more stimulus measures to prevent job losses.

“We are trying to reduce the transactional cost as much as possible and there can be some duty cut, if required,” Kamal Nath said.

The government had unveiled the first stimulus package Dec 7 that called for additional state spending worth $4 billion (about Rs.20,000 crore/Rs.200 billion) in the remaining months of the fiscal to spur growth, while cutting value-added tax across the board by four percent.

The second one announced Jan 2 provided access to Rs.30,000 crore (Rs.300 billion) worth of tax-free bonds to India Infrastructure Finance Co, and called for the setting up of a holding company to provide credit worth Rs.25,000 crore (Rs.250 billion) to non-banking finance firms.

Data released Monday showed that the economy is estimated to grow 7.1 percent in the year to March, down from 9 percent last year.

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