Commerce Minister Calls for Rate Cuts Amid Growth Focus

Union Commerce Minister Piyush Goyal suggests the RBI should cut interest rates to boost growth, challenging the inclusion of food inflation in rate-setting. While RBI Governor Shaktikanta Das refrains from commenting, finance expert Deepak Parekh supports Goyal's view. Goyal reiterates the need for policy reevaluation.

Union Commerce Minister Piyush Goyal has made a strong appeal for the Reserve Bank of India (RBI) to reduce interest rates, arguing that growth needs additional support. He challenged the conventional method of using food inflation in interest rate decisions, calling it a flawed theory at a CNBC TV18 event.

The Minister's view was echoed by finance industry stalwart Deepak Parekh, who advocated for a reduction in both the repo rate and cash reserve ratio. Meanwhile, RBI Governor Shaktikanta Das declined to comment, noting that the six-member panel will decide at its upcoming meeting.

Goyal emphasized that food inflation should not influence interest rates, a stance he's held for two decades. The RBI has previously expressed reservations about excluding food inflation, with October's headline inflation hitting 6.2%. Goyal remains confident that inflation will drop due to seasonal effects.

(With inputs from agencies.)