No reason to believe rate cut will not be growth-inducing

Reserve Bank of India Governor Sanjay Malhotra, along with Deputy Governors Poonam Gupta, T Rabi Sankar, Swaminathan J, and M Rajeshwar Rao, responded to a range of issues during a media interaction after the monetary-policy announcement. Edited excerpts:

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You have retained the growth forecast for this financial year at 6.5 per cent. How much of the tariff impact have you factored in?

Malhotra: You are well aware that we had already reduced our growth forecast, which was earlier 6.7 per cent, to 6.5 per cent. Some of the global uncertainties have been reckoned on in the revised growth forecast. However, there is still uncertainty and it is difficult to predict what the impact will be. We will maintain a very, very close watch on the incoming data and take a call. As of now, we do not have sufficient data to revise our GDP (gross domestic product) forecasts.

Is the RBI worried that tariffs will push up prices because imports will become expensive?

Malhotra: In India we are less dependent on the outside world as far as inflation is concerned. If at all there is an impact, there is also an impact on growth and demand. That has a reverse effect. We do not see a major impact of this unless we have retaliatory tariffs and so on, which I really do not foresee.