New Delhi: Ahead of the RBI’s second quarterly review of the monetary policy, finance minister Pranab Mukherjee on Wednesday said he would like to see a rational interest rate policy moving in tandem with fiscal initiatives taken by the government to boost the economy.
“Interest policy we will like to see that it must be rational, and monetary policy and fiscal policy should move in tandem. It should not be contradictory”, he said in an interview to television news channel NDTV Profit.
Mukherjee’s remarks assume significance as the RBI is slated to announce its quarterly review on monetary policy on 27 October and take steps to check inflationary expectations.
RBI has so far adopted a soft monetary stance and unlocked banking sector funds to boost economy reeling under the impact of the global financial crisis.
Asked whether he was in favour of a tight monetary policy, Mukherjee said, “I would not like to make any premature comment unless I have discussion with him (RBI governor D Subbarao).”
Replying questions on growth prospects, the minister said, “economy has started recovering, though it is slow and I cannot expect dramatic ...(outcome) immediately. It will take some time.”
By end of November, the minister said, the overall impact of the initiatives taken by the government to boost growth would become clear.