New Delhi, Feb 8 (Mayank Nigam) Finance Minister Nirmala Sitharaman on Saturday said there is good coordination between the Government and the Reserve Bank of India (RBI) and no one encroaches on the other’s territory and that is always good for the economy. “There has been good coordination between RBI and the Government. Whether it is growth or inflation, monetary and fiscal policies going in tandem would benefit the economy,” Sitharaman said while addressing the media along with RBI Governor Sanjay Malhotra post Union Budget and also RBI’s policy decision yesterday wherein the key policy (repo) rate was cut for the first time in five years by 25 bps to 6.25 per cent.
The Minister said that industry is seeing signs of possible recovery of consumption, and many of them maybe looking at reviving capacity utilisation. On the new Income Tax Bill, as announced during the Budget, Sitharaman said the Bill has been cleared by the Cabinet and will be introduced in the Lok Sabha next week, post that it will be sent to the Parliament committee and after the government again looks at the recommendations and if required makes necessary amendments. “There are at least three critical stages before it is implemented,” he said. On the recent fall in Indian currency vis-à-vis US Dollar, RBI Governor said there is no change in “our approach on rupee. We don’t target a price level or band for rupee. We only intervene when there is excessive volatility. We trust our market’s efficiency and depend on them to decide on the specific level.” On whether the income tax relief in the Budget and RBI’s decision to cut repo rate would help boost consumption, Malhotra said the cut in repo rate should help and support it. Asked about financial sector reforms as was indicated in the Budget by the Finance Minister, Malhotra said there are lot of issues common to various financial regulators. “We may look into issues like payments, cyber security etc to better the systems.”