RBI to take into account low growth, budget in next policy

Reserve Bank today said it will take into account decelerating growth and Finance Ministry's fiscal consolidation efforts in the forthcoming budget before formulating its monetary policy review next month. "We have taken note of roadmap for fiscal consolidation put out by the Finance Minister. And like everyone else in the country and around the world, we are also looking forward to the Budget to have a better understanding of how fiscal consolidation could be done on the way forward," RBI Governor D Subbarao told reporters after the board meeting here. Commenting on latest growth estimate of 5 per cent for the current fiscal, he said, "We got to know about the CSO projection. We will take that into account as and when we make our next policy." The Central Statistical Organisation (CSO) has pegged the economy growth rate for the current fiscal at 5 per cent, the lowest in the decade. The economy grew by 6.2 per cent in 2011-12. On the possibility of rate cut to boost growth, Subbarao said, "I am unable to comment on rate cuts at this forum." Reserve Bank is scheduled to announce mid-quarterly review of monetary policy on March 19. With a view to promoting growth, RBI in its quarterly policy review last month lowered the key pending rate by 0.25 per cent and reduced the Cash Reserve Ratio (CRR) by the same margin releasing Rs 18,000 crore or primary liquidity into the system. Replying questions on inflation, RBI Governor said, "we have given our assessment (in policy document on January 29). There is nothing further to add to what we said a week ago but going forward we will be taking into account further developments and further data that comes."