Interest rates need to be 'far more affordable': FM Nirmala Sitharaman
Published On : 2024-11-19T09:29:54+0530 [ IST ] |
Author : Mayur_Tembhare
Reading Time : 2 mins
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Finance Minister Nirmala Sitharamanon on Monday called forbank interest rates to be "far more affordable" arguing that several people found the cost of borrowing "very stressful
She said that India required its businesses to ramp up and invest in new facilities so that the goal of "Viksit Bharat" can be achieved.
When you look at India's growth requirements many voices are saying that the cost of borrowing is very stressful. At a time when we want industries to ramp up and move building capacities, bank interest rates will have to be far more affordable. So, we need to have a lot more discussion on using interest rates to control food prices
It is the top three perishables (tomato onion and potato) which are causing stress on the inflation numbers while for the others the numbers are the low 4s (percentage points) or the higher end of 3s. I don't want to get into this debate of whether perishables should be part of the inflation measure index
The FM's statement comes days after Commerce and Industry Minister Piyush Goyal stated that targeting food prices through interest rates was an "absolutely flawed theory".
Sitharaman said there is no cause for undue concern. India's economy remains resilient underpinned by strong macroeconomic fundamentals, moderated inflation a robust external position and continued fiscal consolidation.
She also highlighted the issue of mis-selling of insurance by banks adding that they should focus on their core business of raising deposits and lending.
Sitharaman's comments come at a time when banks are struggling to grow their deposits at the same pace as credit. There is a lot of commentary on the shift of the customer focus from being a saver to an investor. In recent years banks have been pushing insurance investment products encouraging customers to buy policies as the commission was much higher
Despite banks emerging as the biggest distributors of insurance policies there has not been a single case of a bank being penalised for mis-selling of insurance.
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Summary :
Finance Minister Nirmala Sitharamanon on Monday called forbank interest rates to be "far more affordable" arguing that several people found the cost of borrowing "very stressful
She said that
