Arvind Subramanian pitches for rate cut by RBI

NEW DELHI: The RBI should consider cutting lending rates on the back of lower inflation, Chief Economic Advisor Arvind Subramanian said today.

His comments come a day ahead of the Union Budget and in the backdrop of RBI Governor Raghuram Rajan earlier saying that the central bank will wait for Budget cues before taking a decision on further easing of monetary policy.

"Monetary policy condition should ease on back of lower inflation," Subramanian said.

The CEA said that India is poised for rapid growth and investors want macroeconomic stability and higher growth.

He stressed that subsidies should be effectively and well targeted as studies show only 25 per cent of PDS kerosene allocated for poor reaches to them.

Subramanian said India is capable of achieving double-digit growth in the medium term.

"India has reached a sweet spot--rare in the history of nations--in which it could finally be launched on a double-digit medium-term growth trajectory," he said.