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Finance minister Arun Jaitley has assured that the government will not hike interest rates unless the Reserve Bank of India (RBI) has approved it at a higher rate.
Addressing a rally in the Rajya Sabha, Mr Jaitley said, “We will not hike interest rates unless the Reserve Bank of India (RBI) decides to approve it.”
“The interest rate policy will not be altered unless RBI has approved it,” he added.
It is the government’s fourth rate hike in 18 months. The previous rate increase in April was approved by the Supreme Court in October last year.
The RBI Governor Raghuram Rajan recently said rates will not be raised “unless and until the board issues the final announcement on it.”
The RBI has also kept the benchmark inflation at a “stable” level for six months, but has not cut it since the demonetization of high-value banknotes.
Mr Jaitley made the comments while quizzing Congress’s leader Mani Shankar Aiyar on the BJP’s “new politics” as it claimed to not stand by the Constitution.
Aiyar said the government had “done its work”.
“This is a new election for all of us,” he said. “We will see what happens next year, but in the meantime we will work to see what we have done for the poor and for people.”
Mr Aiyar said Mr Jaitley’s government had “taken the money of people and given it to the people”.
“This shows that the BJP is not in your fold,” he added.
He said the government had given away “goods” to the people during the five-year term of the Vajpayee-led government. “Aiyar, there are hundreds of other things you have done,” he said.
The Congress leader said the government was “running a ‘saharshan nahi hai (political witch hunt),” but that “that is what the people want.”
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