Commerce and Industry Minister Piyush Goyal made a big statement about the Reserve Bank of India (RBI) and said that interest rates should be cut so that the Indian economy gets a boost. The impact of this statement has become a topic of discussion not only in the economic sector but also in the stock market. Will his statement support the Indian market? Let's take a look at this.

Questioning the 'wrong theory' on food inflation

Goyal called the inclusion of food inflation in interest rate determination a "wrong theory". He believes that food inflation is only a result of fluctuations in demand and supply, and it is not appropriate to include it in interest rate determination. According to him, fluctuations in food prices should not form the basis of economic policy determination. This approach is also an important part of bringing stability to the economy and encouraging investment.

Market likely to get a boost?

After Goyal's statement, expectations have increased in the market that if RBI takes his suggestions into consideration and cuts the interest rates, then the pace of investment in the market can increase. Stock market experts say that a reduction in interest rates will bring more investment in the financial sector and the cost of capital for companies will be reduced, which will help them expand. This potential move can increase confidence among retail and large investors and can help in the growth of the market.

RBI Governor's response

RBI Governor Shaktikanta Das did not comment directly on Goyal's statement, but he indicated that rate setting will be discussed in the upcoming meeting. This meeting is going to be held in the first week of December, in which the six-member rate setting committee will take a decision in view of the current inflation and the state of the economy. It is clear from this that Goyal's statement may have an impact on RBI's policy, but the decision will depend on the discretion of the RBI committee.

What can the market expect?

After this statement, the market and investors have hoped that if interest rates are reduced, then investment, lending and expansion of companies will gain momentum. Goyal's statement seems to be a direct step towards giving priority to economic growth. He also said that India is the fastest growing economy in the world and a reduction in interest rates is necessary to maintain this pace.

Overall, the market has got new hope from Goyal's statement. Now it remains to be seen what action the RBI takes on this and whether this statement will really provide permanent support to the Indian market.