Jaitley stressed that the NDA government would address the problem of inflation through supply side measures, particularly in relation to food inflation.

“The Reserve Bank of India has reduced the SLR by 50 basis points while maintaining the repo rate as unchanged,” Jaitley wrote in his blog on Facebook.

“It is a priority for the Government to maintain a balance between growth and inflation. The Government is also concerned with restarting the investment cycle and moving towards higher growth and employment generation,” he added.

“We would like to address the problem of inflation through supply side measures particularly in relation to food inflation. Fiscal consolidation is a priority for the Government,” he said.

Jaitley also approved of the measures taken by the Reserve Bank of India (RBI), saying the central bank has followed a calibrated approach, which is aimed in the direction of balancing between growth and inflation.

Jaitley said that by reducing the SLR, the central bank has allowed banks to lend more to the private sector since they will be required to subscribe less to government securities than earlier.

Retail inflation as measured by the consumer price index accelerated to a three-month high of 8.59 percent in April, pushed up by a sharp spike in food prices. Inflation in the food category stood at 9.66 percent.

“The RBI has also chosen to maintain a balance between growth and inflation while keeping the policy rates unchanged,” Jaitley said.

“It has allowed banks to lend more to the private sector since they will be required to subscribe less to government securities than earlier,” he added.

“It has followed a calibrated approach aimed in the direction of balancing between growth and inflation,” he said.

(JPN)

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