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MUMBAI: ?The economy can absorb some reasonable movement in interest rates even though the shift will have to be defined by the prevailing conditions? Finance Minister Pranab Mukherjee said on Thursday. In an exclusive interview with Bloomberg UTV?s Editor-in-Chief Govindraj Ethiraj, the minister also said Reserve Bank of India governor Duvvuri Subbarao will be meeting him in the next couple of days to discuss monetary policy.
?A reasonable interest rate can be absorbed but what is a reasonable rate will depend on the existing conditions,? Mukherjee said when asked about India?s ability to grow even during periods of high interest rate.
Mukherjee also said every country will have to exercise an independent choice on the timing of an exit strategy for the stimulus measures and a straight jacketed approach will not help. The finance minister was referring to India?s stand at the recently concluded IMF annual meeting and the meeting of G20, the group of rich and developing nations.
On economic growth, the minister said it could accelerate to over 6 plus percent in the fiscal year starting April 2010 but it will definitely be over 6.3 percent logged in the previous financial year. The government is trying to put in place policies to help steer the economy back to the ?ideal growth rate of 9 percent? but this may not possible immediately due to poor rains and floods now in some regions, Mukherjee said.
The minister also said the impact of drought have been mitigated substantially and there was no need to panic about low food stocks as prospects for the winter-harvested crop had brightened.
Tune in to Bloomberg-UTV on Saturday 10 pm and Sunday 2.30 pm for this interaction and more?.
