RBI is scheduled to come out with its bi-monthly policy review on September 29 and the pressure is mounting on it to cut interest rate to boost growth.
    
On whether RBI could announce rate cut before September 29, Sinha said, "Of course, RBI takes into account all of that data and (RBI Governor Raghuram) Rajan, I am sure, will apply his judgement to all of these matters."
     
Talking about deflation, a concern which was flagged by Chief Economic Advisor Arvind Subramanian, Sinha said slow growth, excess capacity, declining population and increase in labour force are responsible for deflationary trend globally.
     
"These are powerful deflationary forces that are at work in the global economy. India of course remains a very bright spot in the global economy because we have growth, we have some inflation and we have a very robust underlying demand trends," Sinha said.
     
He also expressed optimism that India will achieve 8 per cent growth rate in the current financial year, although the growth in the first quarter was only 7 per cent.
    
Even Subramanian had yesterday said that deflation is a new challenge for the economy but expressed hope that the growth will be close to 8 per cent in the current fiscal year.

 

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