India's Finance Minister Nirmala Sitharaman calls for lower interest rates

India's finance minister, Nirmala Sitharaman, called for lower interest rates and downplayed any dangers to economic growth.

The Reserve Bank of India has kept rates unchanged for over two years.

Sitharaman follows trade minister Piyush Goyal, who last week argued for a cut in interest rates, stating that economic growth required further stimulus.

The RBI governor, Shaktikanta Das, chose not to address Goyal's comments after the central bank kept rates steady for the tenth straight meeting in October.
According to Das, a rate cut right now would be "Very risky."

The governor added that easing will only be considered if inflation reaches the central bank's target of 4 per cent.

The RBI's next policy decision is scheduled for December 6th.

Speaking at an event, Sitharaman said, given India's growth requirements, there are "Many different voices saying the cost of borrowing is really very stressful." She added, "Bank interest rates will have to be far more affordable."

For the current fiscal year, which ends in March 2025, the RBI projects growth of 7.2 per cent.

However, some analysts, notably those at investment banks like Goldman Sachs, have projected growth as low as 6.5 per cent.

Worries that consumers are cutting back on spending are fuelled by the lacklustre sales of all goods, from soaps to vehicles.

However, downplaying the growth risks, Sitharaman said the government is keeping a careful eye on the economy and is ready to take "All necessary measures" to increase economic activity.

She said, "Let me assure you the government is fully aware of the challenges posed by both domestic and global factors." The finance minister, citing strong economic fundamentals added, "There is no cause for undue concern."