Finance Minister Arun Jaitley may emphasise on the need for a cut in key rates when he meets RBI Governor Raghuram Rajan on Monday ahead of the central bank's bi-monthly monetary policy review.
With expectations of GDP growth moderating in the second quarter, the government is keen to give a fillip to the economy, particularly, when the inflation has come down to multi-year low.
Sources said Rajan will make the customary call on the Finance Minister on Monday, a day before he presents the policy. Jaitley they said may nudge the central bank chief to lower cost of capital to prop up growth. RBI which has kept policy rates unchanged for almost 10 months citing high inflation despite persistent demand from industry and Government for a cut to boost economic activity, is slated to review monetary policy on December 2.
Sources said Jaitley, who is closely watching RBI moves, feels a rate cut will have positive impact on home and auto loans. last week Jaitley had expressed hope that the RBI will move in the direction of making the cost of capital reasonable to help perk up economy.