RBI governor Shaktikanta Das said on Thursday there is room for interest rate cuts to spur economic growth given stable and below-target inflation, but the government has little scope for fiscal expansion.
"Global growth is slowing down and central banks across world are bracing up to counter it by easing monetary policy; but there is no recession as yet," said Das, according to news agency ANI.
"Despite rising external risks, domestic economy is resilient as foreign debt is only 19.7 per cent of GDP," he said, according to PTI
Das, who was speaking at the Bloomberg India economic summit in Mumbai, took charge in December and since then the RBI's monetary policy committee has delivered four successive rates cuts.
"When we see that the price stability is maintained and inflation is much below the 4-per cent mandate and is expected to be so in the next 12 months horizon, there's a room for more rate cuts especially when growth has slowed down," he said.
"So far as the fiscal side is concerned, the government has by and large remained prudent. They have not announced any countercyclical measures that would have lead to fiscal expansion. Most of these things announced are non-fiscal. I think the fiscal space is itself very limited."