New Delhi, May 3: Planning Commission Deputy Chairman Montek Singh Ahluwalia stuck to the government's projection of economic growth of 6.1-6.7 per cent for this financial year, saying the Reserve Bank of India's (RBI) projection of 5.7 per cent was "pessimistic".
The central bank in its monetary policy for 2013-14 on Friday reduced the repo (short-term lending) rate by 0.25 per cent and pegged the economic growth rate for FY14 at 5.7 per cent, against the finance ministry's projection of 6.1 to 6.7 per cent.
"Reserve Bank is clearly more pessimistic than the government is. I think that the government forecast as of now is feasible. Critically what matters is how effective we are in restoring the momentum of investment in the large projects", Ahluwalia said soon after RBI's announcement.
Exuding confidence that growth would improve to over 6 per cent in the current financial year, he said: "I have no idea what Reserve Bank thinks... We are working hard and over the next few weeks we would see that many impediments are removed."
Observing that several risks remain to the economy, Ahluwalia said, "The bottomline is that having looked at all these things, the RBI is moving into a more supportive monetary policy."
On RBI's decision to reduce repo rate by 0.25 per cent, he said, "I welcome the move. The RBI is clearly signalling that policy space on the monetary side has increased. They are taking actions which will essentially support revival of the economy."
Repo rate, he added, was an important signal, though its effectiveness would depend on willingness of the banks to lend to fuel growth and demand.
