Rate cut by RBI will give good fillip to economy: Jaitley

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[Editor: This time there is nothing much to think for the RBI governor, Dr.Rajan, to go for a 25 bps Repo rate cut. This exercise is necessary just to signal that the battle against inflation has at last been won, in style. Many banks have already cut the rates on their FDs, to push-up the credit off-take. The investors and traders are therefore,  suggested to go full steam on Bank and Construction / Real Estate counters. I am not too bullish on the Auto sector, except some selct pockets; as I feel most of the scrips are overvalued there and a crash cannot be ruled out]
November 17, 2014: Union Finance Minister Arun Jaitley has said that since inflation has moderated “therefore, if RBI [Reserve Bank of India], which is highly professional organisation in its wisdom decides to bring down the cost of capital will give a good fillip to the Indian economy”.

Mr. Jaitley also said that the disinvestment targets for current financial year are quite ambitious but he hopes to achieve them or at least come close to achieving them. He said that road shows for the planned disinvestments were underway in many parts of the world.

The Finance Minister was delivering the keynote address at the Citi’s Investor Summit: ‘India – Poised for Higher Growth’. Also present at the summit were Finance Ministry officials and RBI Deputy Governor S.S. Mundra.

Later, Mr. Mundra told reporters that the recent cooling of retail inflation was a combined outcome of factors, including a favourable statistical effect of a high base last year, a downturn in global commodity prices and easing vegetable prices. Official data released earlier this month showed retail inflation too had slowed in October to 5.5 per cent against 6.5 per cent in the previous month

Mr. Jaitley said that the government had taken series of measures for tackling the infrastructure sector’s challenges and that many more such measures were in offing. He said that he is in discussions with the members of opposition parties for making necessary procedural changes in Land Acquisition Act in order to avoid delays in the implementation of the infrastructure projects. He also said that the government through its budget had laid down a direction in which the economy is likely to proceed to restore investors’ confidence and assured that there will not be any movement of economy in contrary direction.

Giving details of various economic reforms in the pipeline, he said he was expecting the Insurance Amendment Bill to be passed in the forthcoming winter session of Parliament for which he was in touch with the Parliament Select Committee.

On the Goods and Service Tax (GST), the Finance Minister said he is in touch with various State Governments for ironing out the outstanding differences. He said States want to retain taxation authority for liquor and petroleum products. They also want entry tax and octroi to be kept out of the purview of the GST. The Finance Minster said that all these issues will be sorted out soon. He will also apprise the Empowered Committee of State Finance Ministers’ about the draft Constitution Amendment Bill on GST before introducing the same in Parliament.

Courtesy: The Hindu