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India Strives to Reactivate Economy

By Prensa Latina,

New Delhi : Governor of the Reserve Bank of India (RBI), D. Subbara, announced today a cut in interest rates by one percent in an attempt to stimulate national economy.

The decision takes place after it was confirmed Friday that inflation keeps on dropping at 8.40 percent in the week of November 22, 0.84 percent less than the previous week.

For his part, the Ministry of Finance indicated in a release that the RBI decision is a clear sign for all banks, in particular private ones, to reduce their rates.

Before the measure announced this Saturday, the public banking sector had already reduced their interests by 0.75 percent, measure still not applied by private entities..

The government pursues to cheapen loans for housing, corporations and retail stores. The news coincided today with a slight reduction in the price of gasoline and diesel, although the government did not reduce as expected the price of liquefied gas.

On the other hand, the awaited announcement of a stimulation package for the economy was postponed, prepared by the Indian government in order to counter the impact of global crisis.

According to the local news agency PTI, the plan includes fiscal measures as a cut in the tariffs of some products, while the allotment of funds for the development of infrastructure is also expected.

The economic stimulus package will probably be presented Sunday by the Prtime Minister´s Office, said PTI.