The Union ministers flagged high interest rates as a dampener for growth at a time inflation, excessive rains and shrinking incomes have severely hit urban consumption

Union Finance Minister Nirmala Sitharaman addresses concerns about economic slowdown, advocating for lower interest rates and addressing inflation risks.

Sitharaman said that people were finding current interest rates 'very stressful' and that banks ought to make them affordable. It is obvious that banks will not unilaterally cut lending rates until the RBI trims the repo from its current level of 6.

Monetary Policy Committee (MPC) has kept key interest rates unchanged since February 2023, citing persistent inflation pressures.

Sitharaman follows trade minister Piyush Goyal, who last week argued for a cut in interest rates, stating that economic growth required further stimulus.

Regarding small businesses, Sitharaman set ambitious lending targets for Micro, Small, and Medium Enterprises (MSMEs), including a target of Rs 6.12 lakh crore for FY26 and Rs 7 lakh crore for FY27, in addition to the Rs 5.

On inflation, FM Nirmala Sitharaman says a set of three or four perishable commodities is driving the headline inflation, currently, and the rest of it, the core items, are at manageable levels of three or four per cent.