Reserve Bank of India Governor Shaktikanta Das has indicated that the government may come up with some countercyclical policy measures on the fiscal side to revive growth which may be another reason why the Monetary Policy Committee did not vote for a policy rate cut despite popular expectation.
“It is also likely that the government may initiate some more counter-cyclical fiscal and other measures to arrest the slowdown,” Das said after announcing status quo on the rate front, disappoint market participants.
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“The forthcoming Union Budget will also provide better insight into further measures to be undertaken by the government and its impact on growth. Against this backdrop, the MPC judged that there is space for further monetary policy action, but felt it appropriate to take a pause at this juncture.”
Source: Economic Times