Persuade governor Rajan to lower rates: Chidu to new govt

Former finance minister P Chidambaram on Friday asked the BJP government to use its persuasive powers to convince the Reserve Bank governor Raghuram Rajan that a rate cut is an imperative, if for no reason other than to signal to investors and consumers that the economy will move toward a lower interest phase.

"The government seems to have been seduced by the rise in the stock market and the adulation showered at organised Indian diaspora events," he adds.

According to the ex-FM, the problems were identified in 2012, corrective measures were taken, and momentum was built up in sectors such as electricity, coal, agriculture and stalled projects were revived. That momentum should have been maintained - and accelerated - in the first six months of the new government. It did not, and the result is poor Q2 growth.