RBI’s repo rate cut following tax relief to drive economic growth: Edelweiss CEO Radhika Gupta

New Delhi: The Reserve Bank of India’s (RBI) decision to cut the repo rate by 25 basis points is a well-timed move that will accelerate economic growth, Radhika Gupta, Edelweiss Asset Management CEO said.

In an exclusive interview, she said that the central bank’s decision is a catalyst for the current economic conditions.

“Lower interest rates will reduce borrowing costs, encouraging investments and consumption, which will ultimately boost the economy,” Gupta told to IANS.

The central bank has slashed the repo rate from 6.50 per cent to 6.25 per cent, marking the first rate cut in five years.

The last reduction was in May 2020 during the pandemic-driven economic slowdown.

Gupta further said that the Union Budget 2025-26 is a “dream budget” for the common man.

“The increase in the income tax exemption limit from Rs 7 lakh to Rs 12 lakh under the new tax regime would leave more disposable income in people’s hands,” she added.

“With higher disposable income, spending and investments will rise, leading to greater demand and an economic boost. This will also have a multiplier effect on growth in the long run,” she stated.

On February 1, Finance Minister Nirmala Sitharaman announced the new tax regime changes while presenting the Union Budget, raising the exemption threshold to Rs 12 lakh to provide relief to middle-class taxpayers.

Gupta further mentioned that despite global uncertainties, India’s economy is progressing at a steady pace.

“Increasing the income tax exemption limit and reducing the repo rate are steps in the right direction. These measures will help accelerate the country’s development,” she said.

“The combination of tax benefits and lower interest rates would support India’s ambition of becoming a developed economy by ensuring sustained growth,” she concluded.

–IANS