(LiveMint)
Reviving consumption demand and private investment remains the top priority in the current fiscal, the Reserve Bank of India (RBI) said on Thursday, signalling the possibility of at least one more interest rate cut this year. To revive growth, governor Shaktikanta Das asked banks to pass on past rate cuts to borrowers at a faster pace by linking lending rates to external benchmarks such as repo rate.
Das’s renewed pitch for addressing the causes of the slowdown in Asia’s third-largest economy comes amid sales of passenger vehicles dropping to a near two-decade low in July and news of mass layoffs across several industries. The central bank has already slashed rates by 110 basis points this year to spur growth. The recent deceleration could be in the nature of a soft patch mutating into a cyclical downswing, rather than a deep structural slowdown, RBI said in its annual report released on Thursday. Nonetheless, there are still structural issues in land, labour, agricultural marketing and the like that need to be addressed, it added.
