India to fight to maintain growth

As both India and China are facing the global financial crisis head on, all measures are being taken in order to protect growth, as India’s monetary policy has been directed towards.

The finance minister, Shri P. Chidambaram, said today that the Reserve Bank of India (RBI) is likely to lower rates, as inflation continues to cool as the economic downturn has had a firm and positive affect on inflation.

It is hoped that inflation will continue to fall and that policy rates will be changed as policymakers are fighting with the impact of reduced export demand.

In order to avert the Indian economy from danger, sharp interest cuts are being called for as well as the banks reserve requirements lowered, so that lending can facilitate further economic growth. This will hopefully result in small and medium sized businesses no longer needing to struggle to get credit in these turbulent times.

Chidambaram’s report released today indicated favourably for rapid and more inclusive growth, even though the International Monetary Fund has released far more conservative figures for growth to the tune of just 7 percent, rather than the 9 percent called for by India.

The Congress party-led federal government also has to face key electoral tests over the next few months, therefore their action will be firmly scrutinised.

Story link: India to fight to maintain growth