New Delhi: Interest rates will slowly become reasonable, the government on Thursday, a day after the Reserve Bank of India (RBI) cut interest rates by 0.25 per cent.
Union finance minister Arun Jaitely in the Lok Sabha said that the lending rate of 14-15 per cent will make India uncompetitive in the global market and industry cannot invest at such higher interest rates.
The finance minister, who was replying to a debate on the Banking Regulation (Amendment) Bill, 2017, said: “Slowly interest rates will become reasonable”.
He said that steps have been taken to offer stable interest rates to investors so that they are not lured into chit fund schemes, which lure investors by offering a meagre 1-1.5 per cent interest rate higher than what is given by banks.
At a time when inflation was running high at 10 per cent bank deposit rates were high at 9 per cent. But loans were extended by banks at 14-15 per cent interest rate and with such high interest rates global industrial investments will not come in, he said.
Mr Jaitely also informed that the government insurance company LIC has come out with a pension scheme to offer fixed rate of interest to investors.
Speaking in the Upper House earlier, Mr Jaitely said that the government has brought a pension scheme for senior citizens and retired persons that guarantees 8 per cent interest rate.
The Pradhan Mantri Vyaya Vandana Yojana (PMVYY) was announced by Prime Minister Narendra Modi in December last year and was launched in May and offers senior citizens 8.3 per cent fixed rate of return.
