In mumbai, India, India's central bank cut its main interest rate by a quarter, to 7.5% (Tuesday), aims to revive stalled in Asia's third-largest economy growth rates for the second time in three months.
The reserve bank of India cites the weak economic growth, greater than inflation worries in 15 quarters. Price is high, especially for food, is still worrying, may limit the scope of Banks, cut interest rates further.
"Economic growth slowed sharply, even as inflation remains at a certain level (i.e.,) is not conducive to sustained economic growth," the bank said in a statement.
The government earlier this month estimated that the economy grew by 4.5% in October to December quarter, fell nearly 10%, the growth rate of over ten years.
While wholesale prices have been hovering at low level in nearly three years, in recent months, retail consumer price index hit a record high of 10.9%, in February, is mainly due to the grain and meat prices.
These two Numbers mean that the bank is how to balance the conflicting goals keep prices under control, lower interest rates at the same time, in order to encourage consumer spending and business investment.
Analysts said, even cut interest rates, interest rates are still too high, encouraged companies to borrow. On Tuesday the central bank also hit the bank deposit reserve rate on Tuesday, was reduced by 25 basis points, to 4% in January. Lower cash reserve ration can make more money, commercial bank lending.
India's economic expansion, the slowest pace in a decade, at the end of the march of this year growth in gross domestic product (GDP) is expected to be 5% smaller. 9% of this from the beginning of 2011, and it match the budget and current account deficits have weakened the Indian currency.
India's finance minister, last month announced a new designed to cut the budget deficit and attract foreign investment budget.
India's statistical agency predicted, only 5% annual economic growth, in 2012-13 of the fiscal year ended March 31, the weakest one of ten years.
The Treasury estimates that 130000 indians entering the Labour market, to create enough new jobs every year, the country needs at least 8% of the growth.
 



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