Another big promise fulfilled with RBI rate cut: BJP

New Delhi: The BJP on Tuesday sought to draw political mileage from reduction in key interest rate by the Reserve Bank of India, saying its fourth fall in a year "fulfills" the party's promise of bringing the rate down to help people avail cheaper loans.

Welcoming the RBI's decision, BJP said it was a reflection of a growing economy under Prime Minister Narendra Modi and Finance Minister Arun Jaitley.

"The reduction in interest rate will bring down EMI and help the dreams of many to have their own homes. It will give a boost to real sector and that in turn will give a fillip to cement and steel industries. Another big promise of BJP of bringing the interest rate down has been fulfilled," party secretary Siddharth Nath Singh said.

Crediting the Modi government's policies, he said the RBI has been able to cut rates because inflation was low and stable over the last few months.

The RBI has also acknowledged that food grain output is expected to be higher than last year despite poor monsoon because of timely advisories and regular monitoring of seed and fertilizer availability by the government, he said.

"There are clear signs of a pick up in consumer demand as reflected by increase in the indirect tax revenues, which again is reflective of appropriate policies of the government," he said.

Noting that the government's and the RBI's reading of the economic situation is similar, he said it was in contrast to the previous UPA dispensation when the Finance Minister and the RBI governor were seen walking in opposite directions.

Home and corporate loans will cost less as the RBI today lowered the key interest rate by 0.50 percent - the biggest cut in over three years - to bolster the economy.