Manmohan Singh sees scope for further moderation in interest ratesMarch 28th, 2009 - 7:37 pm ICT by ANI
New Delhi, Mar 28 (ANI): Prime Minister Dr. Manmohan Singh on Saturday said that plenty of liquidity and low inflation gave room for further interest rate cuts.
Speaking to top Indian businessmen, Singh also said there were encouraging signs in some sectors of the economy.
“With ample liquidity and low inflation, there is scope perhaps for a further moderation in interest rates,” Singh said.
The meeting assumes significance as it comes ahead of G-20 summit in London next month.
“While public sector banks have reduced the prime lending rates in the last three months between 150 and 200 basis points, other scheduled commercial banks are yet to respond in equal measure,” he said.
Since October, the central bank has cut its key-lending rate by 400 basis points. The government has cut factory gate duties and service tax rates to protect growth and jobs.
But commercial banks have been reluctant to lend due to increased risk aversion.
Asia’s third-largest economy is estimated to slow to 7.1 percent in 2008-09 from growth of 9 percent or more in previous years as the global slowdown hurts key sectors of the economy.
But Singh said the auto, steel, cement and farm sectors were showing some signs of revival.
Prime Minister Singh also said the government was closely monitoring sectors which were still facing difficulties.
The Prime Minister appealed to industry leaders to meet the challenge of job losses caused by the economic slowdown.
“These are challenges which can be understood and met only if all the stake-holders concerned continuously exchange ideas and support each other with confidence in the future, and concern for the well being of all. I have great faith and confidence in India’s entrepreneurs and particularly in the wisdom and experience of captains of industry assembled here today to meet the challenges confronting our economy,” he added. (ANI)
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