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Jaswant Singh praises RBI's rate cut

Finance Minister Jaswant Singh praised on Tuesday an interest rate cut announced by the country's central bank as good for the economy and a help to consumers.

"It is progressive, timely and appropriate," Singh told reporters. "It is easier money in terms of credit to consumers."

The Reserve Bank of India cut its key interest rate to a 29-year low of 6.25 per cent from 6.50 per cent and also lowered its 2002-03 growth forecast to 5.0-5.5 per cent from 6.0-6.5 per cent, citing the impact of a widespread drought earlier this year.

Singh said the decision by the central bank to reduce its growth forecast was "based on a slippage in the summer crop".

"I feel notwithstanding the current situation, we will have a good winter crop because of a good and late monsoon," he said.

Singh said the bank rate announced by the central bank was a recognition of an improvement in the overall economy.

"The RBI has acknowledged that the fiscal deficit is lower than it was last year. I intend to build on that," Singh told reporters.

He added tax revenues were higher and exports were rising. "All these are good signs," he said. "We're determined to continue on the reform path because to produce more, we have to reform more."

"The outlook of the economy as portrayed by the central bank with continued low inflation, strong BoP (Balance of Payments), medium growth in view of a low monsoon appears to be quite realistic," Singh added.

The monetary policy is also seen to spur investment, bond and equity markets.

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