Govt to continue debate on rate cut

Tokyo (PTI): Government will continue to argue for lowering of interest rates by Reserve Bank of India (RBI) in the backdrop of softening of headline inflation and the need to promote economic growth, Finance Minister P Chidambaram on Tuesday said. "The RBI has to weigh the fact that headline inflation has come down yet consumer price inflation is sticky. It has to keep Current Account Deficit in mind before it lowers interest rate. But government is always pro growth and the government will always argue for lower interest rates", he said. RBI is scheduled to announce the monetary policy for the current financial year on May 3 during which it will take a call on interest rates keeping in view the inflation and other macro-economic parameters like growth rate, industrial production etc. Chidambaram, who is here to woo investors, said that although inflation based on movement in wholesale prices has come down, the retail inflation in double digit has continued to be a cause of concern. "Core inflation has indeed come down. Headline inflation has also come down but the consumer price inflation is still very sticky at double digit and that's what affects the people", the Minister said. While the WPI inflation softened to 6.62 per cent in January, the Consumer Price Index (CPI) inflation firmed up to 10.79 per cent in the same month. "Insurance companies, large asset management companies are very keen to invest in India. I think there is great deal of interest among banks and insurance companies to gain a footprint in India, we welcome all of them. We have very transparent rules and in the financial sector there is a lot room for new players so my impression is that they are extremely positive about India. India is a safe destination", he said.

No duty hike on gold again Tokyo: Finance Minister P Chidambaram on Tuesday opined that the government is unlikely to raise the import duty on gold, once again. The measure is to check gold smuggling and to help curb the record current account deficit. The Indian government has raised the import duty on gold to 6 per cent to reduce purchases. "We did raise tariffs from 4 percent to 6 percent, but there are limits to which tariffs can be raised on gold, because if you raise tariffs prohibitively, gold smuggling will increase," he said.