Govt to announce measures to boost demand; RBI rate cut likely: PEA Sanyal

There is lots of monetary space as interest rates here are still significantly positive unlike western Europe, where there is zero to negative rates, he said at the India Global Week 2020

Asserting that economic activity is steadily coming back on track, Principal Economic Adviser Sanjeev Sanyal on Thursday said the government will undertake measures to boost demand and there is both monetary and fiscal headroom available. He hinted that the Reserve Bank of India (RBI) may further cut interest rates as a monetary policy tool to perk up demand.

"We have announced packages along the way and most of the packages so far have really been about cushioning the demand shock. We haven't, so far at least, been going to the rebuild of the demand phase. We will in the future.