You are here: Home » Budget » Reactions » Industry
Business Standard

Expect 50-75-bp rate cut in 2015: Keki Mistry

Business Standard  |  New Delhi 

The has taken a bold step by increasing the fiscal deficit target to 3.9 per cent (which I believe is more realistic) for FY 2016. While private investment is vital, public investment is necessary in the interim to revive growth.

Presently, several private sector companies with strong balance sheets have excess capacity and have not been looking to invest. By government investing in infra projects (with a short capex cycle) the multiplier effect on the economy will be realised quickly. Private investments will follow to back the government investment and a combination of the two will create more jobs and consequently generate more income..

Read our full coverage on Union Budget Public investment in infrastructure will not have any spillover effects on inflation. Hence, I continue to believe that interest rates will reduce by another 50 to 75 basis points this year. The goal of building 60 million housing units by 2022 will help the economy as housing has a multiplier effect and forms 6.7 per cent of GDP.

The housing and real estate sector also has strong linkages to nearly 300 industries. Improved sentiments caused by larger investment by government together with lower interest rates will make housing more affordable. In conclusion, it is a very balanced and growth-oriented without creating inflationary pressures.

Keki Mistry
Vice-chairman & CEO, HDFC

Dear Reader,

Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.
We, however, have a request.

As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.

Support quality journalism and subscribe to Business Standard.

Digital Editor

First Published: Sun, March 01 2015. 00:12 IST