Subbarao, FM discuss economic situation

Reserve Bank of India (RBI) Governor D Subbarao on Monday met Finance Minister P Chidambaram and discussed the macro-economic situation. This was the first meeting between Subbarao and Chidambaram following his taking over the charge of the finance ministry last week. “Met the finance minister after he took charge. Reviewed macro-economic situation,” Subbarao said.

The RBI chief further said he would meet Chidambaram again for a detailed discussion on the economy. “Will meet the minister again for a detailed discussion ... (I) did not discuss specific policy action,” he added. Chidambaram has a formidable task to lift the sagging economy and boost investor confidence amid a weak growth outlook globally. Economic growth last financial year slipped to a nine-year low of 6.5 per cent and the prospects for 2012-13 do not look any better. The finance ministry, keen to put in place a mechanism to boost growth, worked over the week-end.

It was also decided on Sunday that Revenue Secretary R S Gujral and Expenditure Secretary Sumit Bose would swap positions. Gujral, however, would continue as Finance Secretary. RBI, in its latest quarterly monetary review last week, had refrained from cutting the key interest rate to boost economy despite intense pressure from the industry. RBI’s stance was guided by its decision to keep inflation under check which is above its comfort level. In June, inflation based on Wholesale Price Index stood at 7.25 per cent, while the Consumer Price Index-based retail inflation was at 10.02 per cent.