The year 2021 could turn out to be India's year of IPO with the domestic unicorns through their public issues setting "domestic stock markets on fire and global investors in a frenzy", an RBI article said on Tuesday. The successful Initial Public Offerings (IPOs) by new age companies in the recent months are a reflection of bullishness about Indian technology, it said. "...growth impulse is igniting financial markets. 2021 could well turn out to be India's year of the IPO.
Maintaining 4 per cent inflation is appropriate for India as targeting a lower rate could impart deflationary bias to the monetary policy, said a Reserve Bank paper. Under the current dispensation, the RBI has been mandated by the government to maintain retail inflation at 4 per cent with a margin of 2 per cent on either side. The paper, authored by RBI Deputy Governor Michael Debabrata Patra and another official Harendra Kumar Behera, has found a steady decline in trend inflation to 4.1-4.3 per cent since 2014.
RBI said the outlook for economic growth for 2016-17 has turned uncertain after the unexpected loss of momentum by 50 basis points in Q2 and the effects of the withdrawal of banned notes
The Reserve Bank remains laser-focused to bring back retail inflation to 4 per cent over a period of time in a non-disruptive manner, Governor Shaktikanta Das stressed while voting for status quo in interest rates, as per minutes of the October policy meeting released on Friday. The central bank has been mandated by the government to ensure the Consumer Price Index (CPI) based inflation is at 4 per cent, with a band of 2 per cent on either side. The retail inflation, which was above 6 per cent during May and June, has started moving down and stood at 4.35 per cent in September.
With inflation under control, the Monetary Policy Committee's (MPC's) job is to support growth because the economy had recovered well from the lows in the initial months of the pandemic, according to the panel's members, who met in the first week of this month. The minutes of the meeting show the Reserve Bank of India (RBI) governor in his statement said: "Given the sharp moderation in inflation along with a stable near-term outlook, monetary policy needs to continue with the accommodative stance to ensure that the recovery gains greater traction and becomes broad-based." Ashima Goyal, external member of the MPC, said: "The current macroeconomic configuration and its expected future evolution imply there is space for the MPC to continue to support the revival of the economy with inflation remaining in the target band."
There is a narrow chance that the central bank may cut rates in the future, according to a poll of 15 economists and treasurers.
The Reserve Bank on Friday approved the transfer of Rs 99,122 crore as surplus to the central government for the accounting period of nine months ended March 31.
India's GDP is within the striking distance of attaining positive growth, the Reserve Bank said observing that the letter "V" in the V-shaped recovery stands for vaccine. The Indian government launched the world's biggest vaccination drive on January 16 to protect people from COVID-19. "What will 2021 look like? The shape of the recovery will be V-shaped after all and the 'V' stands for vaccine," said an article on the 'state of economy' in the RBI's January Bulletin. India has launched the biggest vaccination drive in the world, backed by its comparative advantage of having the largest vaccine manufacturing capacity in the world and a rich experience of mass inoculation drives against polio and measles.
All-out efforts are needed to mitigate the adverse impact of the Covid-19 pandemic, and the RBI will use any instrument necessary to revive growth and preserve financial stability, according to the minutes of the central bank's policy meeting.
Lower inflation, FCNR(B) outflows likely to influence central bank decision
The economy is gaining traction with gradual pick up in manufacturing activity and moderation in contraction of services, spurred by comfortable liquidity conditions, an RBI article on Tuesday said. Observing that the retreat of the second wave of coronavirus pandemic has been slow, the RBI in an article on the 'State of Economy' said, the aggregate demand conditions are buoyed by the release of pent-up demand post unlock, while the supply situation is improving with the monsoon catching up to its normal levels and sowing activity gaining pace. "Reaffirming the traction that the economy is gaining, the manufacturing activity is gradually turning around, while contraction in services has moderated.
Chetan Ghate, Pami Dua and Ravindra Dholakia have been appointed for 4 years
Although there is headroom for further monetary policy action, at this juncture it is important to keep our arsenal dry and use it judiciously: RBI's Das.
Das favoured shifting the stance of monetary policy from neutral to accommodative to send a clear signal, indicating that more measures could be taken in the near future to boost growth.
The fourth consecutive rate cut is expected to lower equated monthly instalments (EMIs) for home and auto buyers, and borrowing cost for corporate.
RBI said at the current juncture, the all-out effort is to maintain and sustain, with the hope that when life is secure, resources, energy and time can be marshalled to rebuild and revive.
Given the pressure from India Inc and the banking fraternity, it is surmised that the portfolio rejig will take place before April.
Pressure has been mounting on the Reserve Bank of India to cut interest rates in the wake of declining retail inflation and the need to fuel growth momentum. However, the RBI will have to do a tightrope walk as globally interest rates are inching upwards.
The banking sector in India is reeling under Rs 8 lakh crore of non performing assets (NPAs) or bad loans, of which PSU banks alone account for over Rs 6 lakh crore.
'During the transition process, we have some control over the withdrawals.' 'In terms of your wealth, the money in your deposit account is where it is.'
'In 2015 I watched films in so many places. I attended several film festivals around the world -- Berlin, Tribeca (New York), Telluride, Toronto, Zurich, Mumbai, Dharamsala and Goa,' says Aseem Chhabra, author of a forthcoming book on Shashi Kapoor.
Hindu-American Congresswon Tulsi Gabbard coasts to a rollicking re-election victory in in Hawaii's 2nd District
