RBI Governor Raghuram Rajan has said that the government and the central bank have started preliminary discussions on the modern monetary policy framework.
Addressing the Reserve Bank of India's board meeting in New Delhi on Sunday Rajan said a committee under RBI Deputy Governor Urjit Patel had recommended an overhaul of the existing monetary policy framework, including shifting focus to target Consumer Price Index CPI inflation rather than inflation based on the wholesale price index. Talking to reporters the RBI Governor said that the Reserve Bank of India and Finance Ministry are not having any difference of opinion over the Government’s proposed financial inclusion project.
Earlier Finance minister Arun Jaitley indicated that the policy regime is being geared towards attaining higher growth, lower inflation and sustainable external balance in the backdrop of macro-economic challenges that country has faced in the last two years.
Addressing the RBI Board meeting, Mr Jaitley said measures are being taken to accelerate credit flow to infrastructure, encourage investments and promote agricultural growth.
He said tax incentives have been expanded to promote household savings.
Later speaking to media after the meeting, Mr Jaitley dismissed worries about the fiscal deficit crossing projections and said that government finances will improve in the coming quarters.
On a question of Disinvestment Mr Jaitley said that the Department of Disinvestment has already appointed advisors in some cases and the follow-up actions on those PSUs on some part of equity is to be divested is already progressing as scheduled.
In the Budget, the government has estimated to collect Rs. 43,425 crore from selling stake in PSUs and another Rs. 15,000 crore from sale of residual stake in the erstwhile government companies.
Regarding Syndicate bank bribery case Finance Minister said that government is ready to take stringent steps to check criminal cases like this.
He said the actions which were required at the government level have already being taken by suspending those suspect of delinquency.
