The Finance Minister, Arun Jaitley, on Tuesday hailed the Reserve Bank of India's monetary policy announcements , stating that the steps would help the Government provide policy support to real economy and help in recovery process.
The steps would boost the economy and help realise medium term growth rates, he said.
Meanwhile, Economic Affairs Secretary Shaktikanta Das said that the Government has decided to review the small savings rates. This decision to review small savings rates has come in the wake of the 50 basis point cut in repo rates by the central bank, Das said.
Jaitley said that this decision of the RBI (to cut repo rate by 50 basis points) implies that inflation pressures had moderated significantly and are now within the comfort zone.
"The Government is fully committed in meeting the fiscal deficit targets in order to consolidate the gains achieved by the contained inflation", Jaitley said.
The Government is now looking forward to the transmission of these cuts which will effectively help boost confidence and investments.
Jaitley highlighted that Indian corporates would also now be able to raise external commercial borrowings through rupee denominated offshore bonds with no end-use restrictions.
This would enable the Indian corporates to get an additional source of resources, he added.
Economic Affairs Secretary Das said there was a strong appetite for rupee denominated bonds in the overseas markets.
He noted that such bonds -- raised in rupees with repayment in rupees -- provides an inherent hedging facility.
"It is after extensive consultation that RBI has announced this (rupee denominated offshore bond)", Das said.
Das also hailed the RBI move to allow Foreign Portfolio Investors (FPI) to participate in state government bonds.
This would provide additional liquidity to the G-Secs market and also help soften the yields, he said.