RBI plans to introduce polythene currency notes for higher denominations

Reserve Bank of India Governor D. Subbarao said the opening of Foreign Direct Investment (FDI) in retail sector would bring down inflation further.

Speaking to reporters after chairing the meeting of the Board of Governors of Reserve Bank of India (RBI), convened here on Thursday after the Cabinet approved 51 per cent FDI, he said it was expected to bring a lot of benefits to the country, producers and consumers. The competitive pricing would be beneficial to the consumers to buy goods at cheaper rates. The RBI was of the view that it would add value to the efforts taken by the bank and the government to rein in inflation. While agreeing that the inflation was not at the comfort level, Dr. Subbarao said that it must be recognised that it had been brought down from double digit mark to around 7.5. It was because of the continuous efforts taken over the period by the RBI and the government. However, it had to be brought down further, he said. A policy review meeting would take place on October 30 to assess the inflation level and a few more measures were expected to be taken, he added.

Asked about the lowering India’s growth rate Dr. Subbarao said the RBI projected the growth rate to be 6.5 per cent. He was confident that the country would again march towards the accelerated growth path as “growth drivers” were intact.