SUBSTANTIAL INTEREST RATE REDUCTION : MANDATORY TO SUSTAIN GROWTH
The Finance Ministry, Government of India as well as Reserve Bank of India have been following a policy aggressively working on containing money supply (M3 ) through increasing CRR, increasing rates of fixed deposits as well as REPO rates whereby clearly signaling an upward journey of interest rates. This policy has been adopted to contain inflationary pressure. These policies measures have
not yielded positive results and inflation is mounting due to increase in international prices of commodities as well as profiteering, hoarding and monopolistic and restrictive trade practices being adopted by a certain section with deep pockets and ulterior motive of making money at any cost. The successive increase in rate of interest has severely impacted the growth rate prospects in industry as well as in the services sector. The housing sector, the real estate sector and the infrastructure sector will get the hit most. A substantial interest rate is a must for propelling growth. The Government of United States has reduced the federal interest rate by more than 60% bringing it down to 2% per annum, with a view to arrest the recessionary tendency. The Govt. of India needs to take a lesson. A lower interest rate regime will also ensure better sentiments and prospects for the capital market,
thereby further fueling channelization of resources for the growth of industry and business. The inflationary tendency, has a positive side. The Govt. must ensure that out of the increase in commodity prices, the resultant benefit must reach substantially to the poor agriculturist. It is he who and the others being part of the peasant community, who are actually helping grow most of the commodities. It this happens the poor man of this country can be helped the most. The Govt. needs to act strongly against restrictive trade practices and stop the lip services by openly threatening certain business houses. The threats are being viewed by the public as an attempt to increase corruption and fleece a part of the booty from the profiteers. India is set to move to double digit growth leading to overall economic development of the poorest of poor. The Govt. needs to courageously ensure adequate money supply and resources at a very reasonable cost. A substantial reduction in the interest cost and increased money supply through reduction of CRR and SLR are a must.
We need to plan to get rid of the onslaught of oil rampage by a united action internationally forcing oil producing countries to come under a regulation of reasonable prices. G7 countries, Brazil, India and China need to act together and force OPEC nations through persuasion and pressure to reduce the prices to a reasonable level. America should be convinced to take a lead in spite of their own interest arising out of large US oil reserve.
not yielded positive results and inflation is mounting due to increase in international prices of commodities as well as profiteering, hoarding and monopolistic and restrictive trade practices being adopted by a certain section with deep pockets and ulterior motive of making money at any cost. The successive increase in rate of interest has severely impacted the growth rate prospects in industry as well as in the services sector. The housing sector, the real estate sector and the infrastructure sector will get the hit most. A substantial interest rate is a must for propelling growth. The Government of United States has reduced the federal interest rate by more than 60% bringing it down to 2% per annum, with a view to arrest the recessionary tendency. The Govt. of India needs to take a lesson. A lower interest rate regime will also ensure better sentiments and prospects for the capital market,
thereby further fueling channelization of resources for the growth of industry and business. The inflationary tendency, has a positive side. The Govt. must ensure that out of the increase in commodity prices, the resultant benefit must reach substantially to the poor agriculturist. It is he who and the others being part of the peasant community, who are actually helping grow most of the commodities. It this happens the poor man of this country can be helped the most. The Govt. needs to act strongly against restrictive trade practices and stop the lip services by openly threatening certain business houses. The threats are being viewed by the public as an attempt to increase corruption and fleece a part of the booty from the profiteers. India is set to move to double digit growth leading to overall economic development of the poorest of poor. The Govt. needs to courageously ensure adequate money supply and resources at a very reasonable cost. A substantial reduction in the interest cost and increased money supply through reduction of CRR and SLR are a must.
We need to plan to get rid of the onslaught of oil rampage by a united action internationally forcing oil producing countries to come under a regulation of reasonable prices. G7 countries, Brazil, India and China need to act together and force OPEC nations through persuasion and pressure to reduce the prices to a reasonable level. America should be convinced to take a lead in spite of their own interest arising out of large US oil reserve.
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