Raghuram Rajan, the governor of India’s Apex Bank, which is under corporate and government pressure to bring down interest rates and boost economic growth, recently underscored that country should focus on achieving sustainable economic growth and also suggested developed economies of doing the same. He further added that economies across the world should focus on sensible, sustainable sources of growth.
India's economy has grown at less than 5% for the last two years and picked up some momentum to grow 5.7% in the June quarter, but this figure is still way below the near double-digit growth last seen in 2008.
Notably, RBI’s governor’s comments come just a day after Finance Minister Arun Jaitley, pitching for a rate cut, underscored that lower cost of capital would provide a good fillip to the economy. He nudged Reserve Bank of India to cut interest rates to boost growth at a time when inflation, especially food inflation had come down substantially over the past few months and global fuel prices ebbed to four-year low.
Cajoling India’s apex bank, FM averred that RBI, which is a highly professional organization, if in its wisdom decides to cut down interest rates then this will give a good impetus to the Indian economy. However, Rajan has been focused on achieving 6% inflation by January 2016 and has often emphasized that sustained economic growth requires inflation to fall and stay low.
Nevertheless, in order to cut down on growing clamor of rate cut, RBI Deputy Governor S S Mundra emphasized the central bank revises rate, but not on 'popular demand' and further stated that it only does when there is a clear conviction in doing so.
MoneyWorks4Me is a SEBI-registered Investment Adviser (IA) dedicated to helping investors build long-term wealth through transparent, research-driven, conflict-free guidance. Founded in 2008, we started our journey as a Research Analyst (RA), providing deep fundamental analysis, intrinsic value insights, and long-term investing frameworks for Indian equities. In 2017, we transitioned to a full-fledged SEBI-registered Investment Adviser, strengthening our commitment to acting as a fiduciary—always putting the investor’s interest first.
To become India’s most trusted, research-powered fiduciary advisory platform—where every investor, regardless of experience, can make calm, confident, and well-reasoned investment decisions.
MoneyWorks4Me ensures this through: