While pointing to a slowing economy and marginally high inflation, the Finance Ministry on Wednesday said it has taken “note” of the decision by the Monetary Policy Committee to keep rates unchanged, based on its analysis of economic growth and inflation.

“We have noted that this decision has been made by the MPC in light of the underlying analysis which implies a downward revision of the real GVA growth forecast for 2017-18 and a marginally upward revision of the CPI inflation forecast for the second half of the year,” it said in an official release soon after the Committee announced its decision.

However, the Ministry pointed out that the lower GDP forecast indicates “a widening of the output gap” and the revision in the retail inflation target means that “an average inflation for the year 2017-18 as a whole of less than 4 percent”.

The RBI has lowered its growth forecast for 2017-18 to 6.7 per cent from the earlier 7.3 per estimate. It also revised upwards its estimate for inflation to 4.6 per cent by the March quarter.

The Finance Ministry had been pushing for a further cut in policy rates to boost growth and had said that the rising inflation has already been factored into its analysis.

The Ministry has however, welcomed the institution building initiatives of finalising Peer to Peer NBFC financing regulations which would improve financing for smaller firms and increasing retail participation in government securities via aggregation of bids by stock exchanges.