Following is the text of the Statement of the Union Finance Minister Shri Arun Jaitley with regard to RBI Policy announced today:

“The Reserve Bank of India (RBI) has reduced the SLR by 50 basic points while maintaining the repo rate as unchanged.

It is a priority for the Government to maintain a balance between growth and inflation. The Government is also concerned with restarting the investment cycle and moving towards higher growth and employment generation. We would like to address the problem of inflation through supply side measures particularly in relation to food inflation. Fiscal consolidation is a priority for the Government.

The RBI has also chosen to maintain a balance between growth and inflation while keeping the policy rates unchanged. It has allowed banks to lend more to the private sector since they will be required to subscribe less to government securities than earlier. It has followed a caliberated approach aimed in the direction of balancing between growth and inflation.”

SLR reduction and unchanged policy rates enable increased bank lending to private sector while balancing growth and inflation. The Reserve Bank of India reduced the Statutory Liquidity Ratio while keeping policy rates unchanged, permitting banks to hold fewer government securities and thereby increase lending to the private sector; this calibrated approach aims to balance growth and inflation, support investment and employment, and is complemented by government emphasis on fiscal consolidation and supply side measures to address food inflation.