Finance Minister & RBI Governor differs on 'Make in India' Programme & Interest Rates
Speaking at a event, Finance Minister again reminded Reserve Bank of India (RBI) Governor Raghuram Rajan to cut interest rate to provide a fillip to the "Make in India" initiative that aims to make India a global manufacturing hub. RBI has held rates steady since January in an attempt to help bring down the inflation rate.
A "singular factor" contributing to the slowdown in manufacturing growth is the cost of capital, which has remained high for months or years, said Jaitley Manufacturers find it expensive to raise much-needed funds for infrastructure creation, with the efforts becoming more expensive on their books, forcing credit offtake to continue to be depressed, added Jaitley. The manufacturing sector shrank by 7.6% in October this fiscal, while overall industrial production declined 4.2%.