RBI may need to slash rates alongside providing fiscal stimulus: Economists

The only way to boost demand may be lowering interest rates to boost consumption, analysts said

The government's frugal economic stimulus package has put pressure on the Reserve Bank of India to intervene, as analysts and economists say measures announced so far are unlikely to have any meaningful impact soon.

The government's Rs 20 trillion economic rescue package outlined last week rests largely on boosting company credit for micro, small and medium enterprises (MSMEs), but it had scant new public spending, tax breaks or cash support to revive demand.

"The cumulative government measures will help partly ease the cash squeeze felt by MSMEs in the immediate term to help them bide time, but not fully resolve