FM Sitharaman to hold post-budget meeting with RBI top brass on Feb 8
Finance Minister Nirmala Sitharaman is set to address the Reserve Bank of India’s central board on February 8 in a post-budget meeting aimed at coordinating fiscal and monetary measures to boost GDP growth.
The meeting will take place a day after the RBI releases its monetary policy review, amid expectations that interest rates may be cut for the first time in five years as inflation pressures ease.
Staying on its fiscal consolidation path, the Finance Minister has reduced the fiscal deficit target for 2025-26 to 4.4 percent of GDP from the previous 4.8 percent. This move is expected to lower the government’s need for market borrowing, thereby providing the RBI with more flexibility to pursue a soft money policy to stimulate growth—a point the Finance Minister is likely to emphasize during the meeting.
The new RBI Governor, Sanjay Malhotra, a former official at the Finance Ministry, has already announced an injection of Rs 1.5 lakh crore into the banking system to ease liquidity constraints in the financial sector.
In addition, the Finance Ministry has revised its net market borrowing estimate for the 2025-26 financial year to Rs 11.54 lakh crore, which should free up more funds within the banking system for corporate loans and consumer spending, ultimately driving economic growth.
Senior officials noted that the fiscal measures outlined in the budget and the RBI’s monetary policy are expected to be aligned to accelerate growth while maintaining price stability.
The Budget also introduced significant income tax cuts for the middle class, exempting 1 crore individuals earning up to Rs 12.75 lakh a year from paying tax. This measure is intended to boost aggregate demand by increasing consumers’ disposable income, thereby further supporting economic growth.
The RBI is expected to maintain adequate liquidity in the economy and moderate interest rates to complement the fiscal initiatives, helping to propel growth, create more jobs, and raise incomes.
