Niti Aayog Vice-chairman Rajiv Kumar said the RBI’s fifth consecutive rate cut reflects India’s overall ambition to accelerate economic growth to touch 8 per cent sooner rather than later.
Speaking at the India Economic Summit, Kumar said with several steps taken by the government in the past couple of months to boost the economy, growth is expected to be around 6.5 per cent this year, although it is “lower than expected”.
“Given all the work done in the last couple of months and today’s RBI’s fifth consecutive rate cut you can see that everything is focused now in accelerating growth further.
“And we do want to have this growth probably at 6.5 per cent this year, which is lower than what we expect. We want it to go up to 8 per cent sooner rather than later,” he said.
The central bank on Friday cut its benchmark lending rate by 0.25 per cent to revive growth that has hit a six-year low at 5 per cent.
With the reduction, the repo rate, at which it lends to the system, will come down to 5.15 per cent. It will bring down borrowing costs for home and auto loans, which are now directly linked to this benchmark.
Stressing that India is achieving progress on raising the growth rate to higher trajectory and sustaining it there, Kumar said,”We have a very ambitious growth target”.
The bottom line is, there is going to be a continued focus on improving investment and business climate in India across states, Kumar said.
On the question of building up India’s infrastructure, he said: “The only thing we want to do now is to attract more long-term funding”.