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Jalan sticks to 6-6.5% growth projection

Maintaining its softer interest rate bias, the Reserve Bank of India on Monday said the economy was expected to grow by 6-6.5 per cent this fiscal despite drought situation in some parts of the country.

"On the limited liquidity or monetary point of view, I don't see any problem as of now," RBI Governor Bimal Jalan told reporters, while asserting that the apex bank continues to maintain the growth projection at 6-6.5 per cent of GDP.

"On the liquidity side, the monetary side and foreign exchange side, we don't see any problem in handling whatever is the requirement," Jalan, who met Finance Minister Jaswant Singh in New Delhi, said.

Asked about any revision in the RBI-benchmark Bank Rate in view of the drought situation in some parts of India, he said: "There is no relationship between the two (revision of bank rate and drought) as long as liquidity situation is good."

Jalan said that RBI maintained its bias towards softer interest rates and it would continue as of now.

RBI, in its April Credit Policy, had announced that Bank Rate would be reduced by 0.5 per cent from the present level of 6.5 per cent.

Jalan, however, was noncommittal on the timing of the rate cut.

He was no problem with inflation rate as of now."

The inflation rate based on Wholesale Price Index increased by 0.49 per cent to 2.48 per cent during the week ended July 13.

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