 "Arvind Panagariya")
India needs 50-100 basis points of interest rate cut, Arvind Panagariya, a senior government adviser, said on Thursday, adding to a growing clamour within the government for further monetary easing to juice up economic growth.
He said the Reserve Bank of India (RBI) should act regardless of the outcome of a US Federal Reserve meeting next week.
"The case for cutting rates is so strong," Panagariya, a formerly US-based economist who joined Prime Minister Narendra Modi's administration in January, told CNBC-TV18 in an interview.
"Whatever, the Fed does, we are ripe for a 50 basis point rate cut," said Panagariya, who has a cabinet rank in the government.
The Federal Reserve is meeting on Sept 16-17 to ponder the timing of the first interest rate rise in the United States since the global downturn of 2008.
With the rate decision widely expected to roil emerging markets, analysts expect the Fed's move to be a critical element in determining the RBI's monetary stance at a policy review meeting on Sept 29.
The RBI has lowered rates by a total 75 basis points lower since January with three cuts. However, it left the policy repo rate on hold at 7.25% at its last meeting, tying future cuts to the inflation outlook.
Companies say the cost of capital needs to come down to spur a wider recovery. At a meeting with Modi on Tuesday that was also attended by Panagariya, Indian business leaders called for interest rates to be cut as much as 1.25 percentage points by next March.
