The Reserve Bank of India's decision to cut rates will help revive investment in the economy, Montek Singh Ahluwalia, deputy Chairman of the Planning Commission said on Tuesday, adding that the economy was beginning to bottom out after a long slowdown. The country's central bank reduced its policy interest rate by a widely expected 25 basis points on Tuesday, taking comfort from cooling inflation to make the first rate cut in nine months to support an economy headed for its slowest growth in a decade.

The RBI unexpectedly also reduced the cash reserve ratio (CRR), the share of deposits banks must keep with the central bank by 25 bps to 4.00 %, which will infuse an additional 180 billion rupees into the banking system.