Expecting a near-term boost to economy from the Reserve Bank of India’s rate cut, Minister of State for Finance Jayant Sinha on Wednesday said the decision should bring down the loan EMIs (equated monthly instalments for loan repayments) significantly, and there was room for further easing of rates.
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Soon after the RBI’s decision, Mr. Sinha said the rate cut was a vote of confidence for the Union budget presented last week.
“What is going to happen to rate cycle moving forward is going to be driven by data and the RBI has signalled this clearly,” he said, while adding that further room for easing rates remained.
He said that inflationary expectations had collapsed and a global trend of deflation was prevalent.
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“We have said in Parliament that we are pursuing a prudent fiscal consolidation road map. Our aim is to move growth onto a sustainable, non-inflationary path... We are in a situation where we see EMIs coming down.
“The RBI has appreciated budget’s ‘fine balance’ It is a welcome step for all citizens of India as everyone is looking for near-term boost in economy,” he added.