'Prime Minister Modi stated several times that we shall not let this challenge go away without converting it into an opportunity to undertake systemic reforms.' 'And hasn't that been reiterated in action?'
With enough liquidity in the system, lending and deposit rates are likely to fall further
Delivering a public speech hours after the RBI launched a rescue act for Yes Bank on March 6, Governor Shaktikanta Das reiterated the RBI's affirmation to do whatever was needed to combat the coronavirus impact. On that day, India had only one confirmed COVID-19 infection, the World Health Organisation was five days off from declaring it as a pandemic and the financially debilitating lockdowns were not even on the horizon. Das' promise on efforts to mitigate COVID-19 impact appeared as a footnote in news reports from the event.
Going forward, the February factory output may be impacted as several industries such as automobiles, technology, pharma and fashion have some exposure to imports of raw and intermediate materials from China.
Both the indices closed at five-month highs, led by financial services, IT and metal stocks, amid persistent foreign fund inflows.
Lower interest rates needed to boost manufacturing, officials say.
However, growth is expected to bounce back to an average of 7.3 per cent in the second half of 2017 and 7.7 per cent in 2018
Inflation in the 'fuel and power' basket in December slumped to 8.38 per cent, nearly half of 16.28 per cent.
The public sector banks are not in a position to cut rates because of their weak balance sheets and massive portfolios of non-performing assets, says Devangshu Datta.
'Credit expansion is probably the quickest way to get the economy going again.' 'Easy credit is like a shot of nitro in a race car: In timely, small, quick, doses it can give a tremendous boost but carried to extreme it can destroy the engine,' points out S Muralidharan, former managing director, BNP Paribas.
Currently, the retail inflation is well below the RBI's comfort level. The government has asked the central bank to keep inflation in the range of 4 per cent.
After facing a drubbing in four states, Congress on Monday got some good news in Mizoram where it powered to a two thirds majority in the assembly elections snapping up 27 of the 40 seats, while the opposition Mizo National Front secured four.
The Instrulab Institute of Aviation Technology (IIAT) opens admissions to become an Aircraft Maintenance Engineer.
Currently, banks follow system of internal benchmarks, including Prime Lending Rate, Benchmark Prime Lending Rate, Base rate and Marginal Cost of Funds based Lending Rate.
The report, however, said it remains watchful of the upside risks to inflation emanating from pass-through of minimum support prices (MSPs), adverse movement in crude oil prices, volatility in global financial markets, lagged impact of the rupee weakness on input prices, adverse implications from fiscal slippage and staggered impact of HRA increases by states and its second-round impact.
Tomorrow's review could also turn out be the last policy anchored by Rajan if the proposed Monetary Policy Committee (MPC) is put in place before the next review due on August 9.
A combination of farm loan debt waivers by state governments and the implementation of the pay commission award could entail some fiscal slippages and pose a risk to inflation
Reversal in the declining economic growth trajectory is clearly the need of the hour and all steps should be taken to bring about this change.
Key risk for price rise is the 'deficient' monsoon that could lead to a pick-up in inflation expectations.
FPIs, which are holding large exposures in Indian debt, could also be expected to book some capital gains as yields slide down
RBI retained the GDP growth for the financial year 2018-19 at 7.4 per cent.
'There are deeper, underlying, forces at work and we need institutional arrangements to guard against them.'
Growth in the third quarter (October-December) is expected to be the weakest in years, with spending hit due to unavailability of enough replacement currency.
'Government of India has the right to give directions to RBI'.
'If the government spends Rs 10 lakh crore this year then you would be looking at a GDP growth of minus 5 per cent.' 'If you do not do this, you will be looking at GDP growth between minus nine and minus 10 per cent.'
Economic affairs secretary S C Garg said that all macroeconomic parameters are performing well.
Issuance of entry permit had been suspended till March 2006.
Reserve Bank of India Governor Urjit Patel on Saturday exhorted banks to reduce their lending rates to push credit demand in laggard segments, saying banks have benefited from influx of low-cost deposits and its previous repo rate cuts.
Since last month, the realty (down 23%), auto (down 16%) and finance (down 14%) indices have underperformed the market by falling over 13%, as against 8% decline in the benchmark indices
Rupee, bonds may see knee-jerk reaction, as Urjit Patel is considered an inflation warrior
Growth impulses, while improving, remain fragile, and a rate hike will be disruptive to interest costs.
'Rate cut should reiterate RBI's commitment in providing confidence to consumers and small business.'
Governments that do not respect central banks' independence will sooner or later incur the wrath of the financial markets, ignite economic fires, and come to rue the day they undermined an important regulatory institution; their wiser counterparts who invest in central bank independence will enjoy lower costs of borrowing, the love of international investors, and longer life spans, said Acharya, who will return to the New York University's Stern Business School in August.
It further pointed out that the twin balance sheet problem -- at the end of banks and corporate -- more attractive interest rates for borrowers in the bond market and from non-banking financial institutions are other reasons for slow bank credit growth.
The internals of the food inflation are worrying, given a broad-based uptick across categories that tend to be sticky, such as proteins, and a narrower-than-expected reduction in inflation for vegetables.
During March, the rate of inflation slowed to the weakest in four months and was below the long-run survey average
Jaitley said if interest rates were lowered, the economy could grow faster than 7-7.5 per cent.
The Nikkei Markit India Manufacturing Purchasing Managers' Index increased to 50.7 in February
Reserve Bank of India Governor Shaktikanta Das tells Anup Roy, Raghu Mohan and Niraj Bhatt that it is time for banks to lower interest rates and start lending to cash-starved finance companies after due credit appraisal and proper risk assessment.
'The Reserve Bank's independence has remained a work in progress, an enduring challenge that the nation has been grappling with on an ongoing basis,' says RBI Deputy Governor Dr Viral Acharya.
