Planning Commission Chief supports FM on interest 'rate-cut' issue

Mumbai, Aug 11 (UNI) Planning Commission Deputy Chairman Montek Singh Ahluwalia has supported the Finance Ministry's stand on the issue of interest rate cut on the home loans.

Talking to the media on the sidelines of the 44th convocation ceremony of the Indian Institute of Technology (IIT), Powai here today, Mr Ahluwalia said the Ministry has done nothing wrong in asking the public sector banks (PSBs) to abide by the decisions taken by their boards rather than going for the rate hike by their managements.

While the board of directors of the three out of five PSBs, who have been asked by the Ministry to go for the cut in the interest rates as hiked by them in recent past, have already held their meetings over the issue. The boards of the remaining two are likely to meet by the month-end.

Mr Ahluwalia said the decisions like increasing the interest rates was upto the boards and not the prerogative of the banks' managements.

On the issue of inflation, he said the country as a whole managed the issue very well. There has always been a reaction if the inflation rises from 4.4 to 4.5 per cent.

''If the government takes a medium-term view, such things are natural to take place,'' he said.

On the issue of soaring oil prices, the Planning Commission Chairman said it may be politically difficult for the government to pass on the burden to the consumers in the wake of the increase of oil prices.

However, the government has taken a balanced view by partially passing the burden on the oil companies in the form of oil bonds, he noted.

Appreciating the job of the Union Railway Minister Lalu Prasad Yadav, he said: ''Lalu Ji has gone for the turnaround of Indian Railways, an act which never happened in the history of the Railway Ministry.'' Similarly, good jobs are being done in the country in the field of construction of roads and development of infrastructure, he added.

UNI KKD SSS NV2059