Govt, RBI will work together for growth: FM

The combined effect of the government’s fiscal policy and the Reserve Bank of India’s monetary measures would help boost consumption and private investments and thereby accelerate economic growth, finance minister Nirmala Sitharaman said on Saturday. Addressing the media after a post-Budget meeting with the central bank’s board in Delhi, Sitharaman said the triggers of consumption-driven growth cycle are clearly being felt by a number of firms that have to make investment decisions. “I see this as a positive sign and with (Friday’s rate cut by the RBI), things can move together in alignment,” she said. The minister also stressed the government would continue to work in a well-coordinated fashion with the RBI to prop up growth and contain inflation. RBI governor Sanjay Malhotra said market forces decide the value of rupee with respect to the US dollar and the central bank is not worried about day-to-day movement of the currency value. The central bank focuses on the value of the rupee in the medium to long term, he said. On the impact of the depreciation of the rupee against the US dollar on price rise, the governor said a 5% fall in rupee’s relative value impacts domestic inflation to the extent of 30-35 bps .The governor added that the RBI will be agile in responding to the liquidity needs of the banking system, both transient and durable.