Five per cent growth is disappointing but only after having reached nine per cent. However, it is still not all that bad, says Andrew Michael Spence.
The rupee appreciation will most likely lead to lower inflation and less ambiguity.
The Reserve Bank may cut key interest rates as early as this week.
Inflation targeting has worked well and the government must stay with it, and the framework is going to work well in the period ahead also, former RBI Governor D Subbarao said on Thursday. He also said low inflation contributes to sustainable growth. Addressing the 'Times Network India Economic Conclave' virtually, Subbarao said the government's proposal to privatise some public sector units is not akin to selling family silver but it is a route for putting India on a sustainable growth path.
'Maybe, India will never be reformed and maybe India will continue to have a quagmire for the rest of history.'
Official GDP data for the second quarter of the current fiscal year ending March are due to for release this Friday.
RBI's out-of-turn rate cut has surprise few economists.
The repo or short term lending rate remains unchanged at 6.75 per cent and the reverse repo rate at 7.75 per cent.
The central bank's currency management will be critical over the next few months. A weaker rupee could help to revive exports. But, the currency must fall slowly and in controlled fashion, says Devangshu Datta.
The Reserve Bank on Tuesday said growth is expected to fall below 5 per cent in 2013-14 in absence of pick-up in manufacturing sector, but likely to recover to 5.5 per cent in the next financial year.
The sector needs to move away from such concepts.
The cutback on export credit refinance facility is another step towards a shift away from sector-specific liquidity allocations.
Despite no change in interest rates, India's largest lender, State Bank of India, last week became among the latest to lower deposit rates, often a precursor to lower lending rates, something some banks have already done for certain consumer loans.
Finance minister Nirmala Sitharaman on Wednesday exuded confidence that inflation would further decline and the government is on track to meet its budgetary target for deficit and said that there is no fear of stagflation in India. Replying to the debate on first batch of Supplementary Demands for Grants 2022-23 in Lok Sabha, the finance minister said inflation has come down and it is now in the tolerable band of the RBI. Inflation has been declining since April 2022 and it is declining further, she said.
Expressing the government's commitment to continue with reforms, Finance Minister Nirmala Sitharaman on Thursday assured India Inc that it is ready to do everything required to revive and support economic growth hit by the COVID-19 pandemic. Stressing that there is a need to promote growth as it helps bring down poverty, she however said it would not be at the cost of inflation. RBI has been mandated to keep inflation at 4 per cent, with tolerance level of 2 per cent on either side.
Rajan's deputy Khan cautions against early celebration of falling inflation, unhedged forex exposure.
The draft regulations in this regard are expected to be approved by the board during the meeting.
Says operating environment for Indian corporate sector has improved during FY15
Delivering the key mote address at the Citi's Investor Summit, Jaitley hoped that as a professional organisation the Reserve Bank will take 'the best decision'.
Fitch Ratings on Friday said it has revised the outlook on India's sovereign rating to 'stable' from 'negative' as downside risks to medium-term growth have diminished on rapid economic recovery. Fitch Ratings kept the rating unchanged at 'BBB-'.
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Privatising public sector companies would have encountered significant opposition from their managers as well as from strong unions.
RBI intervenes in the foreign exchange market to manage volatility and to prevent disruptions to the macroeconomic situations.
The comments from Das assume importance as the government for two consecutive terms have missed its fiscal deficit targets by 10 bps
Growth acceleration will be gradual and it is still early days for a sharp recovery, says Gautam Chhaochharia, executive director and head of India research, UBS.
Fitch Ratings has cut India's economic growth forecast to 8.7 per cent for the current fiscal but raised GDP growth projection for FY23 to 10 per cent, saying the second COVID-19 wave delayed rather than derail the economic recovery. In its APAC Sovereign Credit Overview, Fitch Ratings said India's 'BBB-/Negative' sovereign rating "balances a still-strong medium-term growth outlook and external resilience from solid foreign- reserve buffers, against high public debt, a weak financial sector and some lagging structural factors". The 'Negative' outlook, it said, reflects uncertainty over the debt trajectory following the sharp deterioration in India's public finances due to the pandemic shock.
The RBI has targeted 6 percent inflation by January 2016
It's crucial for Modi to make India an easier place to do business.
Sectors such as Auto, Banks, Capital Goods, FMCG, Metal, Oil & Gas and Power are trading marginally lower.
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According to the global financial services major, the primary concern for the RBI at the moment has to be anchoring elevated inflation expectations and stabilising the currency, which could face renewed pressures if the Fed begins QE tapering this week, as widely expected.
After making a larger-than-expected cut of 50 basis points on September 29, Rajan urged the federal government to do its bit to accelerate growth through structural reforms.
India Inc on Wednesday said the Reserve Bank's move to cut interest rate by 0.50 per cent is "pro-growth" and exhorted banks to transmit the lower interest rate to borrowers to revive demand and kick-start the investment cycle.
'Justice B V Nagarathna has excellent human qualities and is a stickler for the law.'
'The actions of Indian monetary authorities will depend on how quickly they want the inflation to come down to 4 per cent.'
Morgan Stanley expects the central bank to cut rates this week, 125 bps in cuts through 2015.
After navigating the turbulent pandemic waves, the recovering Indian economy is now sailing through unchartered waters of rising coronavirus cases, spiralling commodity prices and spiking inflation though the lighthouse of sustainable growth remains visible. As 2022 begins, a raft of developments, ranging from Budgetary announcements to continuation of stimulus measures to monetary policy, will set the tone for the domestic economy, which is projected to grow more than 9 per cent in the current fiscal ending March 2022. The country's continuing massive vaccination drive and 'precaution' doses starting for select categories of people this month will provide a firewall against any steep spike in coronavirus cases amid the emergence of the Omicron variant.
Since March 31, 2022, the PSBs' market cap has risen 43.7 per cent, from Rs. 7.29 trillion to Rs. 10.47 trillion. It's time for the government, the majority owner of public sector banks, to reap the benefit of the rally in bank stocks, recommends Tamal Bandyopadhyay.
Indian economy is poised to do better on the back of reforms undertaken by the government and is expected to clock a 6.5-7 per cent growth in the remaining part of the decade, Chief Economic Advisor (CEA) V Anantha Nageswaran said on Tuesday. Addressing reporters here after the tabling of the Economic Survey in Parliament by Finance Minister Nirmala Sitharaman, Nageswaran said that by and large, inflation is likely to be "well behaved" in FY2023-24 barring headwinds. "My optimism is that in the coming decade, rest of the decade, the potential GDP growth, without taking into account export potential, because global economy is still rife with uncertainty, the growth rate would be around 6.5 to 7 per cent, rather than between 6 per cent and 6.5 per cent," he said.
The RBI cited lower-than-expected inflation, weak crude prices and weak demand, as well as the government's commitment to sticking to a fiscal deficit target as reasons.
Food prices probably fueled a sharp rise in India's retail inflation in December after the record low struck the previous month.
The RBI must cut rates to spur growth, say experts.
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