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RBI’s rate cut goes beyond lowering interest rate: Garg (IANS Interview)
By Manish Gupta and Vishav
New Delhi, Feb 8 (IANS) The Reserve Bank of Indias decision to cut lending rates goes beyond lowering the rates and gives a broad message that would impact the economy as a whole, says Economic Affairs Secretary Subhash Chandra Garg.
“As far as the impact is concerned, these rate decisions play into the economy in a very serious manner. It’s not just that there would be some reduction in loan rates or something. But it gives a very clear stance,” Garg told IANS in an interview.
He said the reduction in interest rates for loans would just be the immediate effect of the RBI’s decision and more symptomatic. However, the decision itself gives a broad message to the economy that the lower interest rates are justified.
The Reserve Bank of India (RBI) cut its key lending rate to commercial banks by 25 basis points to 6.25 per cent on Thursday. It is the first cut in one and a half years. The RBI also changed its stance from ‘calibrated tightening’ to ‘neutral’.
The RBI’s move is designed to ease the liquidity crunch, which had become a bone of contention between the government and the central bank earlier. Incumbent Shaktikanta Das replaced Urjit Patel as RBI Governor last December. Das presided over his first Monetary Policy Committee (MPC) meeting that brought in the rate cut.
“All the economic operators, borrowers, lenders take (RBI rate cut) into account, they reassess their costs. So, it plays into it. There are different transmission channels through which the monetary policy is passed on. This is more important,” Garg said.
He said the monetary policy affects the government borrowing rates, bond rates and plays into other implications like investments made by public and private sectors.
“Investment decisions are to some extent affected by the interest rates prevalent in the economy. Logically in a lower interest rate situation the investment should go up. However, there are many other factors and it is not one exclusive factor,” he said.
As for the sudden rate cut despite the RBI keeping the ‘calibrated tightening’ stance, which indicates the possibility of a rate hike, Garg said the bank may have named it ‘calibrated tightening’ but their thought in the details reflected more of a ‘neutral’ stance.
“The last policy had continued with ‘calibrated tightening’ in words but in the body of the policy statement, if you note, that spoke of virtually ‘neutral’ stance. In words it was ‘calibrated tightening’, but actually it was ‘neutral’,” the Secretary said.
On whether he expected the easy monetary policy trend to continue for some time in the near future, he said all depends on the situation prevailing two months from now when the next bi-monthly MPC meeting will be held to review the rates.
On the interim dividend that the RBI is expected to transfer to the government, Garg said the bank’s central board will take a decision on it based on the profit it makes and on the needs of the bank before deciding the amount to be transferred.
As per the budget estimate for 2018-19, the government had assessed it may get Rs 68,000 crore from the RBI as its dividend of which it has already received Rs 40,000 crore. The RBI’s central board meeting is scheduled on February 18.
(Manish Gupta can be contacted at [email protected] and Vishav at [email protected])
–IANS
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Dr. Abhishek Verma Dedicates a Shelter in Memory of His Mother, Veena Verma, at KGMU; Inaugurated by Daughter Nicolle Verma
World-renowned business tycoon Dr. Abhishek Verma has supported Foodman Vishal Singh’s Hunger-Free World mission. In memory of his mother, Late Veena Verma, who was a 3 term Rajya Sabha MP.
Dr. Verma dedicated a state-of-the-art free permanent shelter for the attendants of patients at KGMU Medical University, Lucknow, under the aegis of Vijay Shree Foundation. His daughter, Nicolle Verma, inaugurated the shelter.
During the event, Foodman Vishal Singh honored Nicolle Verma by presenting her with a memento. Mrs. Nidhi Sharma and Avantika Yadav, associated with the organization, welcomed her with garlands. Following this, Nicolle Verma distributed essential items to the attendants and also handed out fruits. She became emotional remembering her grandmother on her birth anniversary.
On this occasion, she also inaugurated the “Veena Verma Sevalaya” in memory of her grandmother, Veena Verma, to serve the attendants. She expressed, “I feel proud that my family is engaged in nation-building as well as social service. Today, in collaboration with Vijay Shree Foundation founder Foodman Vishal Singh Ji, I feel immensely proud to dedicate this shelter for the poor, helpless, and needy attendants of patients battling serious illnesses like cancer. I am honored to be associated with the Hunger-Free World Mission for humanity.”
Inspired by the continuous humanitarian service provided by Vijay Shree Foundation over the past 17 years, Nicolle Verma donated 10 lakh rupees to support the cause. The purpose of this donation is to ensure that services continue for the needy attendants of patients suffering from severe illnesses in hospitals, as facilitated by Foodman Vishal Singh.
It is noteworthy that Dr. Abhishek Verma’s family has a legacy of public and philanthropic service. They are helping millions to carry forward the values and service work of their parents. On the occasion of his mother’s birth anniversary, Dr. Abhishek Verma dedicated this state-of-the-art permanent shelter at Lucknow Medical College to serve the attendants of patients through the Vijay Shree Foundation.
Supporting Foodman Vishal Singh’s Hunger-Free World mission, Dr. Abhishek Verma assured that he would continually support keeping this flame of humanity alive. He also promised to assist in providing medicines to the helpless patients.
Continuing her grandmother’s legacy of service, Nicolle Verma personally served food to the needy patients and attendants. She said, “It is our good fortune to have received the joy of doing this noble work today through Foodman Vishal Singh. I have taken another step forward in carrying my family’s values and cooperation by joining hands with the Vijay Shree Foundation. My father taught me to serve and help the needy, and I feel happy when I bring a smile to someone’s face.”
On the birth anniversary of the late Veena Verma, the event organizer, Vijay Shree Foundation founder Foodman Vishal Singh, said, “We feel proud and happy that Dr. Abhishek Verma, a globally renowned business tycoon, has extended his support to uplift our country from the hunger index. Today, on his mother’s birth anniversary, he inaugurated a state-of-the-art permanent shelter at Lucknow Medical College, which will always be helpful for the needy attendants of patients. It is a pleasure for me and the organization to receive the affection of Mr. Verma.”
The event was attended by General Manager Verma Family Office Hemant Garg, Sonu Rajput, and the organization’s volunteers, including Sandeep Singh, Parmeshwar Ji, Prashant Rao Gautam, Balram Singh, Ramesh Chaudhary, Suman, Jeetu, Anil, Suraj, Vinay, Manish Bhadauria, Manas Mehrotra, Vivek, Apurv, Happy, and others.
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