RBI has done a fair job in cutting rates, its time to push demand now, says FM Arun Jaitley

New Delhi(PTI): Finance Minister Arun Jaitley on Thursday said RBI has done a fair job by reducing interest rates over a period of time and hoped that the banks will pass on the benefit to borrowers to help boost demand and growth.

Finance Minister Arun Jaitley

“The banks are now in the process of passing over (rate cut benefits). Only a part of it has been passed over. So, as interest rates go down, the possibility of people going in for housing will increase. As far as auto sales are concerned, they are on the rise,” he said.

The minister hoped that in the ensuing festive season, auto companies will roll out more models and the overall demand will pick up.

RBI has lowered interest rates by a total of 1.25% since January, but banks are yet to pass on the entire rate cut benefit to borrowers.

Also Read: No more rate cuts by RBI’s Raghuram Rajan for next 18 months?

“I must say to the credit of RBI that RBI has done a fair job. Over the last 12-13 months, 125 basis points have been cut… Everybody has to concede that RBI has done well. Now, what they do in future will depend on how the inflation targets are met and I think we must trust their judgement,” Jaitley told CNBC TV18.

The minister said the likelihood of falling short in terms of revenue collection is going to be “very marginal” as indirect tax revenues would exceed Budget estimates.

On growth prospects, he said: “I’m anticipating a good rate of growth, we will probably cross last year’s figure and compared with what’s happening in the rest of the world, it is going to be significantly higher.”

He said rural demand is an area of concern as the monsoon has remained below normal for two consecutive fiscals.