More steps on anvil to boost growth: Chidambaram

The government will take more policy steps in the next one-and-half months to revive growth, Finance Minister P Chidambaram said while appreciating the RBI's initiative to unlock Rs 17,000 crore (Rs 170 billion) of banking funds through reduction in CRR by 0.25 per cent.

"I am very confident that between now and October 30 the government is expected to take a number of additional policy measures and also lay out a plan of fiscal consolidation.

"The response of RBI on October 30 will be far more supportive of growth," Chidambaram told reporters.

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The Reserve Bank is scheduled to come out with second quarter monetary policy review on October 30.

In its mid-quarterly monetary policy review announced earlier in the day, the RBI lowered cash reserve ratio, the portion of deposits banks park with RBI, by 0.25 per cent to 4.5 per cent.

CRR reduction would infuse Rs 17,000 crore into the financial system.

The RBI, however, kept short-term lending and borrowing rates unchanged, disappointing India Inc.

Chidambaram, said: "It (CRR cut) is a small step, but a welcome step. I am not disappointed with the RBI policy.

"Mid quarter review by RBI is encouraging and supportive. RBI is slated to take more decisions".

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After assuming charge of the Finance Ministry last month, the Finance Minister had said he would take steps to boost economy and revive investor confidence.

Economic growth had slowed to a nine-year low of 6.5 per cent in 2011-12.

The GDP growth in the April-June quarter was 5.5 per cent, lower than 8 per cent recorded in same period of last fiscal.

The government has already taken a slew of reform measures including allowing FDI in multibrand retail and allowing foreign carriers pick up stake upto 49 per cent in Indian aviation companies.

Besides, the government hiked diesel prices by Rs 5 a litre and capped the number of subsidised LPG per family to six a year.