Poll promise fulfilled with lending rate cut: BJP

The BJP on Tuesday welcomed the RBI's reduction of its short-term lending rate and claimed its government had fulfilled one of the promises made during the 2014 Lok Sabha polls.

"The BJP welcomes the reduction in short-term lending rate by the Reserve Bank of India governor (Raghuram Rajan) by 50 basis points. This is the fourth reduction in interest rate in a year. The monetary policy accommodation is a reflection of a growing, robust economy under Prime Minister Narendra Modi and Finance Minister Arun Jaitley," Bharatiya Janata Party national secretary Sidharth Nath Singh said in a statement here.

"The fundamentals of the Indian economy are strong as reflected by the growing forex reserves, increased foreign direct investment, control over fiscal deficit as well as current account deficit," he added.

Singh said Tuesday's reduction in short-term lending rate would bring down the equated monthly instalments of home, car and personal loans and ultimately help many who wish to purchase own homes.

The BJP leader said the RBI was able to cut lending rate primarily because inflation was low and stable over the last few months.

"This is reflective of the government's measures to keep prices of most commodities under check. The RBI has also acknowledged that food grain output is expected to be higher than last year, despite poor monsoon, due to timely advisories and regular monitoring of seed and fertiliser availability by the government," he said.

Taking a dig at earlier Congress-led United Progressive Alliance government at the Centre, he said, "The government and the RBI's reading of the economic situation is similar, in contrast to the previous government when the then finance minister and the RBI governor were seen speaking in contrasting terms."