New Delhi: BJP spokesperson and leader Prakash Javadekar has said that the Reserve Bank of India’s sudden decision to raise bank rate by 0.25 basis points will not bring down the prices but instead will prove counterproductive and will actually fuel price rise.
The UPA government has increased Bank Rate, CRR, Repo Rate and Reverse Repo rate umpteen times without any tangible results.
The government strategy to combat inflation remained restricted to squeezing the demand by raising the interest rates.
When NDA demitted office Bank Rate and Repo Rate were 6% which have been raised to 9% by UPA government. This has ensured high interest rate regime to the detriment of the export industries and raised EMIs for the middle class. The high finance cost impacts adversely all the segments of the economy.
The UPA government never succeeded in addressing the supply side issues, thus failing in arresting the inflation. This is the result of bankruptcy of ideas on the part of Manmohan Singh and Chidambaram in reviving the economy.