The Finance Ministry on Wednesday said it had taken “note” of the Monetary Policy Committee’s decision to keep rates unchanged, based on its analysis of economic growth and inflation.

“We have noted that this decision has been made by the MPC in light of the underlying analysis which implies a downward revision of the real GVA growth forecast for 2017-18 and a marginally upward revision of the CPI inflation forecast for the second half of the year,” a Ministry statement said soon after the MPC announced its decision.

However, the Ministry pointed out that a lower GDP forecast indicated “a widening of the output gap” and the revision in the retail inflation target meant that “an average inflation for the year 2017-18 as a whole of less than 4 per cent”.

The Reserve Bank of India has lowered its growth forecast for 2017-18 to 6.7 per cent from the earlier 7.3 per estimate. It also revised its estimate for inflation to 4.6 per cent by the March quarter.

“RBI projects increasing growth of 6.4 per cent, 7.1 per cent, and 7.7 per cent in second to fourth quarters. Inflation projections for the year as a whole remain below four per cent,” said Subhash Chandra Gupta, Secretary, Department of Economic Affairs in a tweet.

The Finance Ministry had been pushing for a further cut in policy rates to boost growth and had said that the rising inflation has already been factored into its analysis.

The Ministry has however, welcomed the institution-building initiatives of finalising Peer-to-Peer NBFC financing regulations, which would improve financing for smaller firms and increasing retail participation in government securities via aggregation of bids by stock exchanges.

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