Financial measures to boost consumption, pvt investment: Finance Minister

Finance Minister Nirmala Sitharaman on Saturday said fiscal and monetary measures announced recently would help boost consumption and promote private investment.

Market forces decide Rs value: RBI

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• Reserve Bank Governor Sanjay Malhotra on Saturday said that the market forces decided the value of rupee with respect to the US dollar and the central bank was not worried about day-to-day movement of the currency value.
• Addressing the media after the meeting of Finance Minister Nirmala Sitharaman with the Reserve Bank board, Malhotra said the central bank focused on the value of the rupee in medium to long term

The Budget presented by the Finance Minister on February 1 proposed a slew of measures including significant income tax cuts for the middle class. Individuals earning up to Rs 12.75 lakh in a year will not have to pay any taxes, benefiting 1 crore taxpayers.

On the monetary side, the Reserve Bank on Friday slashed the policy rate by 25 basis points, the first rate cut in five years to support growth.

“After the Budget, the few inputs I’ve had from some business leaders is that the orders for fast-moving consumer goods for April-June are already getting booked, and the industry is clearly seeing signs of a possible recovery of consumption,” she said at a media interaction after addressing the Board of the RBI in the customary post-Budget meeting.

As a result, she said, many of them are looking at reviewing their capacity utilisation itself, which means you could safely see that the triggers for a consumption-driven cycle are clearly being felt by those who have to make investment decisions.

“So, I see this as a positive sign and with yesterday’s decision of the RBI. Together, things can move in alignment and the required traction we made in this course,” she said.

She also said both the government and the Reserve Bank of India would continue to work in a well-coordinated fashion to prop up growth and contain inflation.

Fiscal and monetary policy are working in tandem and there has been good coordination between the government and the RBI, she added.