Cut augurs well for industry: Rajeev Talwar

The 25-basis point rate cut has come at the right time. A near-normal monsoon, robust sowing for the kharif season and supply-side measures to curb food inflation gave the Reserve Bank of India (RBI) the necessary space to cut rates right at the beginning of the festive season.

No wonder, the six-member Monetary Policy Committee voted 6-0 in favour of a rate cut. With the economy at a take-off stage, a rate cut now augurs well for the industrial sector and should give a boost to overall demand in the economy. A sizeable public investment in roads, railways and inland waterways, strong auto sales numbers in September, and rising demand for both steel and cement suggest that the pace of economic growth is picking up.

Further, the finance ministry has taken unprecedented structural reforms and launched multiple steps in the right direction to bolster the economy. We, now, earnestly hope that the banks will quickly pass the benefit of this repo rate cut to their customers by bringing down their lending rates as the liquidity conditions are easy and there has been further downward adjustment in the small saving rates. A cut in home loan rates will surely help buyers firm up their decision to buy a house this festival season and give a fillip to sales.

Rajeev Talwar
Chief Executive Officer, DLF