Expecting inflation to remain under control, Finance Minister Arun Jaitley on Saturday said that he is hopeful that the downward move in interest rates will stay. Speaking at a housing market event here, he said that the Reserve Bank of India (RBI) has lowered the rates on four occasions this year, which was a positive step for the real estate sector that was earlier adversely impacted by the hardening of rates.
The RBI has cumulatively lowered its policy rate by 1.25 per cent so far in 2015, including by 25 basis points thrice and a better-than-expected 50 basis points in the last monetary policy review. “Interest rate hardening had impacted this (real estate) sector adversely and it was a pre-requisite that we kept inflation under control for a sustained period of time.
“Fortunately, that has happened. Therefore, we can also look back with a sense of satisfaction that over the last one year, the RBI has also at least on four occasions taken positive steps as far as the rates are concerned,” Jaitley said.
“Hopefully, this movement is there to stay and in the current global price structure, we are able to keep inflation under control,” he added.
Meanwhile, Chief Economic Advisor Arvind Subramanian said on Saturday that India would need to focus on education and produce more and more graduates if it wants to maintain the growth momentum and become an IT powerhouse again. Speaking at the first convocation ceremony of Shiv Nadar University, Greater Noida, he observed, “In the last 10-20 years, India has grown very rapidly.
The information technology and services sectors, which had slowed considerably in the last 4-5 years, have boomed”. “So, if India has to maintain its growth momentum, it has to be a powerhouse once again... If that has to happen, we have to be producing more and more graduates,” Subramanian added.
Making a case for greater participation of the private sector in higher education, he said, “If we don’t have intellectual capital, we won’t be able to negotiate trade pacts. We need educated elites to have intellectual capital.” He further said that many big global companies want to come to India because the country has “a good higher education system”.
“Now, Google, Amazon, Facebook all want to come, and all of this would not have been possible had we not had a great system of higher education. Education has become a symbol of aspirations of India. Higher education has become the ultimate aspiration for middle class Indians,” he said.
The CEA, however, regretted that the while focusing on higher education, the leaders couldn’t provide adequate attention to primary education.