Prime Minister Narendra Modi will push for stepping up global cooperation against the key issue of cross border tax avoidance and evasion at the G20 summit
With the Budget-making exercise in full swing, RBI Governor Shaktikanta Das on Friday said Budget 2021-22 is expected to be prudent and growth oriented. Das before donning the hat of RBI Governor was a career bureaucrat and was directly involved in crafting of about 10 Budgets for the country including one in the aftermath of global financial meltdown in different capacities at the finance ministry. In view of unprecedented pandemic and its impact on the economy, he said the government has maintained fiscal prudence in the response to deal with the crisis.
A two-year extension at the helm of the RBI still looks a real possibility
The World Bank has appointed Indermit Gill, an Indian national, chief economist and senior vice-president for development economics at the multilateral development bank. "Indermit Gill brings to this role a combination of leadership, invaluable expertise and practical experience working with country governments on macroeconomic imbalances, growth, poverty, institutions, conflict, and climate change," World Bank President David Malpass said in a statement. His appointment will be effective September 1, 2022.
Finance Minister Arun Jaitley said RBI and the government are in continuous dialogue and that relationship will continue.
The speed at which he led the central bank in different areas -- ranging from internal reorganisation to inflation fighting, stabilising the currency, taking on rogue corporations, cleaning up bank balance sheets, and opening the sector -- makes one believe that Rajan knew he had only three years to do his job. A fascinating excerpt from Tamal Bandyopadhyay's MUST-READ Roller Coaster: An Affair with Banking.
The RBI had lowered policy rates by 0.50 per cent between January-March to prop up economic growth.
The council wants the government to stick to its fiscal consolidation road map.
Despite admitting to price pressures both from food items and input prices, RBI Governor Shaktikanta Das on Wednesday hoped that a normal Southwest monsoon will have a "soothing impact" on inflation pressures and ruled out any wide variations in medium-term inflation forecast from what was given in April. In an unscheduled address earlier in the day amidst the raging pandemic, Das said the overall outlook for the economy is highly uncertain and is clouded with downside risks. He offered a slew of relief and liquidity measures to individuals and small businesses apart from a Rs 50,000 crore special liquidity window to the healthcare sector.
While the collapse of a large financial intermediary can wreak havoc on the system because of the interconnectivity, a large business conglomerate too can play spoilsport if the banks have too much exposure to the entity, explains Tamal Bandyopadhyay.
The statement, issued after the 2-day meeting of the 6-member Monetary Policy Committee of the Reserve Bank of India, also said that recapitalisation of public sector banks along with resolution of stressed assets under the Insolvency and Bankruptcy Code (IBC) will create demand for fresh investments.
At the same time, however, officials at the central bank lowered their projections for the long-run target interest rate, evidence of slightly diminished expectations for a nation climbing out of a severe crisis and struggling with demographic headwinds like declining labor force participation.
A statement from the finance ministry said, 'it shall be the policy of the Sri Lankan government to suspend normal debt servicing...shall apply to amounts of affected debts outstanding on April 12, 2022'.
CREDAI Chairman Lalit Jain said a long term status quo on interest rates would not help prospective home buyers.
Rajan retained the short-term lending rate at 6.5 and the cash reserve requirement of banks at 4 per cent.
Qin, who recently succeeded Wang Yi, had a phone call at the request of Bilawal on January 9, a Chinese Foreign Ministry statement in Beijing said on Tuesday.
Broader market outperformed with the S&P BSE Midcap index adding 0.7%, while S&P BSE Smallcap index gained 0.6%.
S&P Global Ratings on Tuesday affirmed India's sovereign rating at the lowest investment grade of 'BBB-' for the 14th year in a row with a stable outlook, and said that the country's strong external settings will act as a buffer against financial strains despite elevated government funding needs over the next 24 months. The sovereign credit ratings on India reflect the economy's above-average long-term real GDP growth, sound external profile, and evolving monetary settings, S&P Global Ratings stated. "India's democratic institutions promote policy stability and compromise, and also underpin the ratings. "These strengths are balanced against vulnerabilities stemming from the country's low per capita income and weak fiscal settings, including consistently elevated general government deficits and indebtedness," it said in a statement. S&P Global Ratings has forecast economic activity in India to begin to normalise throughout the remainder of fiscal 2022, resulting in real GDP growth of about 9.5 per cent.
India's exports remained in the negative territory for the 11th month in a row.
China's birth rate has been in decline since 2017, despite easing of the 'one-child policy' in order to avert an incoming demographic crisis.
The report said that "we believe, institutions are more important than individuals" and ultimately what is important is the credibility and the independence of any institution and nothing else.
During a three-hour long virtual meeting with CEOs of large public and private sector banks along with heads of NBFCs, the prime minister assured them that the government is ready to take all steps to support the financial sector.
The new Chief Economic Advisor Krishnamurthy Subramanian believes that more than unemployment, it is the quality of employment which needs to be focused on. In an interview with Arup Roychoudhury and Indivjal Dhasmana, Subramanian said that controlling inflation was the Modi government's biggest achievement.
The rupee is expected to remain under pressure in the near term, given the strengthening of the dollar against major global currencies and widening of the trade deficit.
Media has gone beyond its traditional boundaries.
Head of state-run Indian Bank T M Bhasin had called for a CRR cut.
As a result, the forecast of eight per cent retail inflation by January next year looks achievable.
RBI had asked banks to price fixed rate loans of up to three years based on marginal cost of funds from April 1
Taking advantage of the RBI's different accounting year, the Centre had started demanding an interim dividend till the time the latter's final balance sheet is prepared (usually in August). To address this anomaly, an expert committee led by former RBI governor Bimal Jalan had recommended aligning the RBI's financial year with that of the government.
If you are one among the millions of existing borrowers who are paying a higher interest rate compared to new borrowers of the same bank, make your shift now, before prepayment charges make it more expensive.
Retail inflation remained above the RBI's comfort level for the second consecutive month despite slipping slightly to 6.26 per cent in June while the factory output recorded a growth of 29.3 per cent in May, mainly on account of the base effect, the government data showed. The marginal slippage in the Consumer Price Index (CPI)-based inflation was noticed despite little firmness witnessed in the food inflation which inched up to 5.15 per cent in June from 5.01 per cent a month ago. Retail inflation based on Consumer Price Index (CPI) was 6.3 per cent in May 2021 and 6.23 per cent in June 2020.
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 downgraded World Bank forecast follows a similar move by the International Monetary Fund, which cut its growth forecasts two months ago
Markets have witnessed a gap down opening mirroring losses in the global equities with US markets taking a hit on worries about the health of Chinese economy.
Has the Modi government been more at odds with institutions than other governments? There is no doubt that there have been more run-ins. While the RBI and CBI cases have drawn attention, there have been others, less publicised, Subhomoy Bhattacharjee points out.
After three sessions of weakness, the rupee strengthened by 50 paise against the dollar.
he reason behind the cut in policy rate seems to be a slowing economy
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.
'Rajan's exit will have a great impact on the economy.'
Banks might hold on to lending rates for the time being.
