Home Minister Rajnath Singh said that the decision could cost the government roughly Rs 15,000 crore.
A strong set of industrial output numbers for January provided the perfect backdrop to reap more dividends, with the IIP having expanded 2.7 per cent year-on-year.
Progress of monsoon, investment trend by foreign investors and the movement of rupee against the dollar will also influence sentiment
The government is somehow convinced that selective low-rate lending will stimulate demand and accelerate economic growth that plunged to a four-year low of 4.4 per cent in the first three months of 2013-14.
'So far, the government has sanctioned more than Rs 300 billion as GST refunds,' Ansh Bhargava and Aditya Singhania point out.
Fourth quarter earnings of blue-chips such as Infosys, TCS, Wipro, RIL and inflation data for March will dictate the trend on the bourses in a holiday-shortened week ahead, experts said.
The central bank has lowered its policy rate twice so far in 2015.
Sun Pharma was the best gainer among Sensex components, surging 6.91 per cent
The RBI gauges both measures of inflation when deciding on monetary policy,
The longest winning streak was the six years between 2002-2007 when the Nifty moved from around 1,000 to over 6,000.
The rupee recovered 14 paise to 66.40 against the dollar in early trade on Monday.
The rapid deceleration in prices has ignited a debate in New Delhi whether Asia's third-largest economy is heading towards deflation.
On the gaining side, Hero Moto, SBI, HDFC, HUL and L&T have gained between 1-1.4 per cent.
Industrial production was seen growing 1.8 per cent from a year earlier in July, slower than June's 3.4 per cent increase, according to the median consensus in a poll of 31 economists.
Rajan addressed a group of investors in Boston on Thursday.
In the broader market, the S&P BSE Midcap added over 1% to finish at record closing high
The Reserve Bank of India hiked key interest rates by 0.25 per cent each in the last two reviews to tame inflation.
Financial services firm AnandRathi analysed the key points of the policy soon after it was announced.
Financial services firm AnandRathi analysed the key points of the policy soon after it was announced.
The Reserve Bank of India is widely expected to lower interest rates for a third time this year.
Finance Minister expects rate cut by RBI.
Fall in both WPI and CPI inflation to pressure RBI, say analysts
The stronger than expected monsoon has not yet softened food inflation as much as it should have and in particular, vegetable prices have been impacted by weather-driven supply disruptions, said RBI Governor D Subbarao while unveiling the first quarter monetary policy review.
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During April-February, the index of industrial production, a measure of factory activity, declined 0.1 per cent compared with a 0.9 per cent growth in the corresponding period of 2012-13.
Next set of Q4 FY16 earnings, progress of monsoon along with election poll outcome will dictate market trend this week
The government hopes of registering GDP growth rate ranging between 6.1-6.7 per cent in 2013-14.
Shifting its stance of monetary policy towards targeting retail inflation as it is an "inequitable tax", RBI today said it may exceed 8 per cent by March end and efforts will continue to bring it down.
About 1,556 shares have advanced, 1,211 shares declined, and 182 shares are unchanged.
Markets extended gains for the fourth consecutive day tracking gains in banks, capital goods and oil and gas majors.
Food prices probably fueled a sharp rise in India's retail inflation in December after the record low struck the previous month.
Capital inflows continued to aid the rupee's rise, although a strong dollar overseas capped the gains.
India's manufacturing sector activity contracted for the third straight month in October amid falling levels of production and new orders, as the business climate within the country remained tough, an HSBC survey said on Friday.
In April, the World Bank had projected India's GDP would grow at 6.1 per cent in the current financial year and at 6.7 per cent the following year.
Standard Chartered on Friday lowered India's growth forecast for the current financial year to 4.7 per cent from earlier 5.5 per cent, citing "upside risks" to inflation and fiscal deficit.
n the broader market, BSE Midcap and Smallcap indices are trading higher by 0.3% each.
According to bankers and economists, there is room for further rate cut by the RBI as retail and wholesale inflation rates have remained benign.
As inflation rate is near the upper limit of the comfort zone, experts rule out rate cuts anytime soon
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As on Monday, the prices of many vegetables had fallen as much as 50% compared with those a month before, due to increased supply, following the arrival of winter crops in the markets.
The RBI has targeted 6 percent inflation by January 2016
The country's near-term outlook hinged on a benign inflation trajectory, uptick in industrial activity and falling crude oil prices
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