<p>Days before Reserve Bank of India (RBI) Governor Raghuram Rajan unveils his bi-monthly monetary policy, Finance Minister Arun Jaitley on Monday (22 September) asserted common sense says the interest rates should come down.<br><br>Jaitley said inflation is "very much under control" and the country is better prepared than most emerging economies to weather the global economic turbulence.<br><br>"Common sense says the rates should come down," he told Britain's <em>The Financial Times.</em><br><br>The RBI is scheduled to present its fourth bi-monthly monetary policy of the current fiscal on September 29 amid clamour by the government and the industry for an interest rate cut to bring down cost of capital and boost growth.<br><br>Jaitley said if interest rates were lowered, the economy could grow faster than 7-7.5 per cent.<br><br>This year since January, the RBI cut interest rates by a total of 0.75 per cent in three tranches but refrained from taking any action at the last monetary policy review in August.<br><br>"If oil is selling at half the normal price, commodity prices are low, and we have stocks and stocks of food grain, then inflation is the least of our worries," he said. India imports about 80 per cent of its oil needs and is a big beneficiary of low global prices.<br><br>On the proposed interest rate setting monetary policy committee (MPC), Jaitley hinted that a compromise had been reached and that the government might not have the deciding vote after all, FT said.<br><br>"The government and the bank are on the same page as far as this is concerned," he said, adding that India's proposals were in line with many other countries.</p><div>Rajan said on Friday that India must focus on keeping inflation low and avoid using monetary policy alone and short-term government incentives to fuel short-term economic growth.</div><div> </div><div>The RBI chief is under growing pressure, from industry and from within the government, to cut interest rates as India's economic growth stutters and inflation cools.</div><div> </div><div>Rajan said monetary policy can help strengthen the current economic recovery, but he added India will ultimately "expand sustainable growth potential only by continuing to implement reforms the government and regulators have announced."</div><div> </div><div>"For us at the RBI, the key tasks are to keep inflation low, not just today, but well into the future," he said in a lecture organised by the Confederation of Indian Industry.</div><div> </div><div>(Agencies)</div>
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