RBI Cuts Benchmark Interest Rate Again, Lowers GDP Forecast To 7.2%

Economy facing headwinds, need to spur private investment, says central bank

- Manojit Saha

The monetary policy committee of the Reserve Bank of India (RBI) for the second consecutive time cut the benchmark lending rate by 25 basis points to 6% on Thursday.

It cited concerns over growth as it lowered the GDP forecast to 7.2% for the current financial year from 7.4% projected in the February policy.

The central bank said the output gap remained negative and the domestic economy was facing headwinds, especially on the global front. (Output gap refers to the difference between the actual output of the economy and its maximum potential.)

“The need is to strengthen domestic growth impulses by spurring private investment that has remained sluggish,” it said.