The career bureaucrat-turned-central banker walked into the 19th floor corner room of the Reserve Bank on December 12, 2018. Since February 2019, the Das-led RBI has cut the repo rate by a whopping 135 basis points to support the sagging growth, including an unprecedented 35 bps reduction in August. As he completes one year at the helm, woes in the NBFC sector, overall health of the banking sector and steeply falling economic growth are among the major challenges that needs to be tackled sooner than later.
In an interaction with Jash Kriplani, A Balasubramanian, managing director and chief executive officer, Aditya Birla Sun Life Asset Management Company, shares his optimism on what makes him believe that these cuts can help in addressing multiple issues plaguing the economy, without letting fiscal deficit pose any major risk.
The ministry sought to allay the rating agency's concerns and said economic growth was on an upward swing.
There is also a lobby within the bureaucracy that wants to see Rajan's influence curtailed
'...Unless we muck up our policies.' 'We have to become a modernised economy.' 'Our institutions should be stronger. And that is most important.' 'The rule of law should prevail and contracts should be enforced.' 'Above all, we have to recognise the importance of globalisation.' 'It is in our favour at this stage. We should grow and become globally competitive.'
Budget-makers in North Block are looking to maintain this fiscal status quo, in spite of tax revenues nowhere close to where the government wants and in spite of possible higher expenditure commitments.
The Reserve Bank of India is not a free agent. It never has been, nor should it ever be.
'Trust your new governor,' Omkar Goswami advises RBI Deputy Governor Viral Acharya. 'Just because he is from the IAS and doesn't carry a PhD from a US university does not make him unsuitable for the task.' 'If anything, Das will pour oil on troubled waters, and save the RBI's reputation.'
Central banking is a science, not an art, Tamal Bandyopadhyay tells RBI Governor Shaktikanta Das.
Rajan's exit will neither affect the RBI's de facto independence nor its working.
Fifty per cent of bank restructured assets were in infrastructure, steel, power and telecom sectors.
'From where prime ministers sit, it makes no difference at all who occupies the governor's post.' 'Literally anyone with a decent education or work experience can be appointed to the job, which is basically a managerial one with little room for manoeuvre,' says T C A Srinivasa-Raghavan.
The 64-year-old Planning Commission, a vestige of the socialist era, will soon become history.
Issuance of new bank licences proves that the apex bank wants the financial sector to flourish.
The Centre had set up a Commission under former Reserve Bank of India Governor Bimal Jalan to suggest steps to rationalise subsidy and help the government in effectively bringing down the fiscal deficit.
The issue is likely to be discussed on Thursday at a meeting of Sebi's board, which would also be apprised of the impact of the Finance Ministry's decision for not agreeing to such a proposal from the capital markets regulator, sources said.
Besides advancing the presentation of the Budget to perhaps the first week of January, , there are four new initiatives that could be rolled out from the next Budget, says A K Bhattacharya.
The pipeline for well-qualified and experienced policy economists at senior levels of government has broken, leading to a growing dearth of suitable candidates for top economist positions.
A long crisis with a lack of sound short-term, long-term actions can result in sluggish growth in India, similar to that in Japan.
The obvious temptation for Mr Jaitley would be to achieve a better fiscal deficit figure than what he had promised in July.
The finance minister defended the change in the tax rates.
FM indicates adherence to fiscal road map, benign tax rates, correction in inverted duty structure
Rajan, as expected, furthered his predecessors' agenda and continued with the same resolution to make India's financial system safer, and direct the economy towards further liberalisation
Rajan tells RBI colleagues he will be returning to academics
Chief Economic Advisor Arvind Subramanian's interview.
'Tilting at the Government in English in front of India may make him feel like Joan of Arc, but without a feel for Bharat he will merely be Don Quixote,' says S Muraleedharan, former managing director, BNP Paribas.
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