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Thumbs-up to RBI Governor Raghuram Rajan for his timely action
Yes, Raghuram Rajan is Raghuram Rajan. He cut the repo rate by 50 basis points only when he felt that now its time to push the growth. The investors and bankers are happy from the Reserve Bank of India's decision.

Whatever Raghuram Rajan says, he has cut the rate by 50 bps while assuming that inflation would not exceed to six per cent by January. Being the Governor of Reserve Bank of India he always has the freedom to take decisions on monetary policy of the country, until and unless the Union government brings changes in the powers allocated to him.

In recent times RBI Governor and Finance Minister appeared to be at logger heads but situation never exceeded the limit. There was a clear competition between the former finance minister P. Chidambaram during the UPA regime and the then Governor of RBI, D Subbarao but they showed it in public. Likewise the same thing is visible sometimes between the present finance minister Arun Jaitley and Raghuram Rajan. But, both maintains respect for each other.

It is very common for the Government to focus on keeping the growth rate running forward but the Governor of the RBI has to keep the inflation also under control. Once rate cuts are beyond the required level it leads towards higher inflation, which results in increasing in prices of commodities. Price rise is a curse for common man and the RBI has this responsibility to protect the common man's interest. Subbarao, the predecessor of Raghuram Rajan, always used to say this and he never bowed to then Finance Minister's interests.

Now, Raghuram Ranjan is also a careful man who always stands for the poor man's interest. Though he was under pressure to cut the interest rate from the side of government as well as investors, but he never surrendered to them.

After a curious wait both the government and investors are very happy and their happiness was doubled as they thought that the Governor would go for a 25 bps rate cut only.

What has government wanted is fulfilled and it is time for it to control the inflation and boost the growth. When the growth rate is slowing down Reserve Bank has taken step in accordance to the government and supported a lot.

The coming time is going to be festive season for the country. The RBI's move is expected to boost the sales of many commodities, particularly the Housing sector may get some major benefits out of this rate cut.

As the Repo rate has been brought down by 50 basis points many banks will follow the suit. Already some banks including SBI have announced base rate reduction, which is a good sign for the future.

The present and former Finance Ministers respectively Arun Jaitely and P. Chidambaram both have welcomed the RBI governor's decision.

It is expected from Raghuram Rajan that he will take right steps in the interest of the country and won't come under pressure from any sector be it government or the industry.

Editorial NOTE: This article is categorized under Opinion Section. The views expressed in this article are solely those of the author and do not necessarily represent the views of merinews.com. In case you have a opposing view, please click here to share the same in the comments section.
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