News APP

NewsApp (Free)

Read news as it happens
Download NewsApp

Available on  gplay  » Business » Will fight inflation at any cost, says Rajan

Will fight inflation at any cost, says Rajan

February 24, 2014 19:01 IST

Photographs: Sahil Salvi/Rediff

Reserve Bank of India Governor Raghuram Rajan on Monday said the central bank's focus is to bring down inflation to boost investor confidence.

Rajan also expressed hope that a stable government after the Lok Sabha elections will continue the broad fiscal policies of the current regime and India may finally get the Goods and Services Tax, an ambitious indirect tax reform measure.

"My belief is that we should be focused on getting our fundamentals right and that has been our focus ever since the summer of last year.

. . .

Will fight inflation at any cost, says Rajan

Photographs: Amit Dave/Reuters

“One of the main aspects of our fundamentals is the inflation rate.

"If investors have a sense that inflation rate is going to come down, both domestic and international investors, they would be more prepared to take a bet on the rupee and that is essentially what we are focused on," Rajan said in an interview to CNBC.

After the US Federal Reserve indicated in May last year that it would taper its monetary stimulus, the rupee depreciated to a record low of 68.85 against the dollar on August 28.

The Fed started gradual withdrawal of its monthly bond-buying programme in January.

. . .

Will fight inflation at any cost, says Rajan

Photographs: Danish Siddiqui/Reuters

Both the government and the RBI took steps to check the slide of the rupee, which has recovered and closed on Monday at 62.07 against the dollar.

On policy expectations after the general elections, Rajan said it would depend on which government comes in.

"Even within the Congress, if a new United Progressive Alliance comes in, it could be quite different from the current government with a generational change. The jury is out on how it will change.

. . .

Will fight inflation at any cost, says Rajan

Photographs: Rupak De Choudhuri/Reuters

"My sense is if there is a stable coalition in power post-elections, no matter which persuasion it is, broad policies will continue," the Governor said.

He said that "there may be a difference in details but they are all" for passing the GST and for a number of actions, which the current government is taking.

The Governor said after the election, "hopefully, on some of the areas where we need to make changes, we will move forward."

He said all parties had agreed on GST but it could not be done before the elections.

"So post-elections, hopefully, that will happen," he said.

To a query on bad loans of banks, Rajan said their non-performing assets need to be brought down.

Tags: GST , Rajan
© Copyright 2023 PTI. All rights reserved. Republication or redistribution of PTI content, including by framing or similar means, is expressly prohibited without the prior written consent.