Finance Minister Arun Jaitley on Friday said that he hoped interest rates would be reduced should inflation ease, days after data showed consumer prices easing to their lowest since figures were first published in January 2012. “Interest rates have gone up. Hopefully, if inflation moderates, they will come down,” Jaitley told Parliament, he however, did not give specifics on the level of inflation.
Data on Monday showed consumer prices led inflation eased to 7.31 percent in June, helped by a slowdown in food inflation and a favourable statistical base. The Reserve Bank of India uses retail prices as its main inflation gauge while setting its monetary policy. It will next review rates on August 5.
Rejecting criticism over the hike in FDI cap in defence sector to 49 percent, Jaitley today said the step was necessary for boosting domestic industry of a country which imports up to 70 percent of its military hardware. Justifying the decision to raise the cap from 26 percent, he said the country is dependent to a large extent on foreign sources for meeting its defence requirements and they can “stop supplies” during times of war. “We are importing 70 percent equipment from foreign sources.
The question is that those who oppose the idea of 49 percent FDI in defence sector, you can buy 100 percent equipment from foreign sources but oppose our own…I think the 49 percent (FDI limit) approach in is larger national interest,” Jaitley said replying to a Lok Sabha debate on Budget.
Jaitley praised the DRDO saying it was “doing quite a lot to meet the requirements of the armed forces but the Services need much more and that will come through domestic industry.” During the Budget debate Jaitley said he has earmarked Rs 50 crore for setting up de-addiction centres in Punjab. He said the government will set up special Rs 2,000 crore fund in NABARD for development of food parks.
