The government of India has made a big announcement regarding rate of interest and due to this announcement, lots of people are excited. Most of People are believed that this move by the government is going to have a huge impact on the economy of different sectors. So, In this article we will know about this announcement and also see the impact of this announcement on different sections of the society.
Important Factor you should Know About The Big Announcement Regarding Interest Rate
Few Days before, the government has made a big announcement regarding the interest rate. Government will reduce the interest rate. Financial Experts told that the main reason behind this announcement is to boost the economic growth of the country. Repo Rate is reduced by 25 basis points to 5.75% as per the new announcement of The Reserve Bank of India. This decision has been taken taking into consideration the current economic situation of the country and is likely to provide our country with excellent economic growth.
Over the last few years, especially post pandemic, our country has been experiencing a major slowdown in the economy. So, to compensate for that, the government has taken this drastic move. It is believed that this reduction in interest rate is going to help businesses and consumers to a great extent. It is also going to impact the manufacturing sector in a positive way.
Now that the government has made a big announcement regarding the interest rate, the business will be able to grow to a greater extent without having to worry about how exactly they are going to acquire the required funding for their business. This also offers better investment opportunities. However, it can also lead to a depreciation of currency which has become a major cause of concern for some.
Impact of This Big Announcement on The Different Sections Of Society?
In this section we will discuss about the real impact of this announcement on the different section of society. Most of the benefited section is real estate, because real estate is directly impacted by interest rate. The real estate industry is likely to be benefited massively by the reduction in the interest rate. A reduced interest rate is going to make it easier for the buyers to apply for a loan. This will also lead to an increase in the demand for homes which is again going to be a big source of income for the real estate industry. It is also going to increase property prices to a certain extent.
The automobile industry is also supposed to be benefited by the interest reduction. Low interest rate is helpful to to increase the sale of automobiles. A reduction in the interest rate is going to urge the people to spend more on vehicles and cars. People will be inclined towards investing in a new car for themselves. This is again something really good for the economy of the country.
However, Each and every thing has two sides of coin, positive and negative impact. This announcement also comes with certain negative impacts as well. The banking sector is likely to be impacted the most. The reduction in interest rates can reduce the profitability of the major banks. This is again going to affect the availability of credit for the consumers and businesses. The interest reduction can also impact the stock market.
So, as you can see, Overall the decision of the government to reduce the rate of interest is likely to have an impact on the different segments of the economy. The main reason of this announcement is to boost the economics of the country, it also comes with certain negative impacts. So, let us wait and see how the different sectors respond to this change in the upcoming months.