New Delhi: The finance ministry welcomed an inter-meeting rate cut by Reserve Bank of India (RBI) on Thursday, saying it reflected easing inflation concerns and vindicated the government`s efforts to achieve economic growth without stoking inflation.
Deputy Finance Minister Jayant Sinha also told Reuters that the quarter-point rate cut would mark an "inflection point" after a period of high interest rates.
Sinha said the RBI decision was driven by declines in both actual and expected inflation, and not by any concerns that India`s economic recovery was losing traction.
"The economy is picking up momentum," Sinha told Reuters in a brief telephone interview.
"The signs are very positive that economic momentum has rebounded. We are likely to see a significant acceleration in growth."
Sinha, a former McKinsey consultant, is a key advocate of supply-side economics in Prime Minister Narendra Modi`s team. He has called for shifting spending to investment and away from welfare entitlements that have in the past driven up prices.
"The goal is to achieve faster growth which is non-inflationary," he told Reuters.
