Taken note of RBI status quo, lower growth forecast: Finance ministry | business-news | Hindustan Times
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Taken note of RBI status quo, lower growth forecast: Finance ministry

The ministry, however, welcomed the initiative with regard to Peer to Peer (P2P) NBFC financing regulation.

business Updated: Oct 04, 2017 19:58 IST
A plaque bearing the Reserve Bank of India logo hangs on the wall of the RBI headquarters in Mumbai on June 7.
A plaque bearing the Reserve Bank of India logo hangs on the wall of the RBI headquarters in Mumbai on June 7.(AFP File Photo)

The finance ministry on Wednesday said it has taken note of the RBI decision to maintain status quo on interest rate and the downward revision of growth forecast for the current fiscal.

The ministry, however, welcomed the initiative with regard to Peer to Peer (P2P) NBFC financing regulation, saying it would benefit smaller firm.

Reserve Bank of India (RBI) has kept benchmark interest rate unchanged at 6 per cent in view of upward pressure on inflation and lowered the growth projection to 6.7 per cent from earlier estimate of 7.3 per cent for the current fiscal.

In a statement, the ministry said: “We have noted that this decision has been made by the MPC (monetary policy committee) in light of the underlying analysis which implies -- a downward revision of the real GVA growth forecast for 2017-18 from 7.3 per cent to 6.7 per cent, which leads to a widening of the output gap...

“A marginally upward revision of the CPI inflation forecast for the second half of the year meaning an average inflation for the year 2017-18 as a whole of less than 4 per cent.”

The government, it added, welcomes the institution building initiatives of finalising the P2P NBFC financing regulations which would improve financing for smaller firms.

It further said that increasing retail participation in government securities via aggregation of bids by stock exchanges and other measures will deepen debt market.