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Updated: January 14, 2013 23:20 IST

Montek makes case for lowering interest rates

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Montek Singh Ahluwalia
The HIndu
Montek Singh Ahluwalia

The Planning Commission, on Monday, made a case for lowering of interest rates to attract investments and reverse the declining trend of economic growth.

“...lowering interest rates and reduction in fiscal deficit is important for the stabilising and growth of the economy,” Planning Commission Deputy Chairman Montek Singh Ahluwalia said, while delivering the 15th JRD Tata Memorial Lecture.

The Reserve Bank is slated to announce its monetary policy review on January 29, amid industry demand for lowering of interest rates to spur growth.

He said investments in infrastructure had to be financed through increase in domestic savings, as reducing the fiscal deficit was important for long term sustainability.

“...investment in infrastructure is quite critical as it is a major constraint to India’s ability to attract both domestic and foreign investments and make it more productive,” Mr Ahluwalia added. He said: “Investment inflows have significantly declined by about three percentage points since 2007-08 in the aftermath of the global economic crisis.

“We need to reverse this trend to achieve high economic growth and for this we need fixed investment of 35 per cent by the end of the (current) plan period, from the level of 34 per cent in 2007-08.

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sir,the car industry like honda ford andtoyota are running in
loss.the demand for cars became less as interest rates for vehicle
loans are higher.the companies take loan for the furterance of
industry. if banks lending rates are reduced the industries will
grow. we waived agricultural loans as agriculturists could not repay
loan due to low productivity of agricu;tural industry also
like kingfisher etc are i reds,.where they will go. our govts pet
airindia is rescued witha hope of next we could not
denationalise the govt departments . it is expected with lesser
lending rates if announced by rbi it will be timely and healthier for

from:  kannappan.r
Posted on: Jan 17, 2013 at 21:18 IST

Can he make any other case?He is an economist seeped in a particular
economic ideology.He believes that greater liquidity,even if borrowed or
channelized through dubious route,is better option despite high
inflation and diminishing value of rupee.Not only he is entitled to his
thought but he also immune from facing music.He heads a body that should
have been abolished in early seventies itself.

from:  Kailash Singh
Posted on: Jan 16, 2013 at 16:58 IST
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