'If you consider only demonetisation and GST as my government's work, it will be a big injustice to me.'
The Reserve Bank of India (RBI) is precariously balancing two opposing objectives - maintaining easy financial condition in the domestic market, while ensuring external stability - and economists have started taking note. They say India is going through the classic trilemma of the 'Impossible Trinity'. The RBI cannot have an independent monetary policy (setting domestic interest rates) in an environment of an open capital account and flexible exchange rates. What is even more complicated for the central bank now is that financial market stability overlays all the other three objectives.
There has been criticism of the official statistics ever since MoSPI came out with new methodology to estimate the GDP on the base year of 2011-12 compared to earlier 2004-05.
'Given the 50 per cent or thereabouts increase in borrowing that has been announced, it is a reasonable estimate to say that at this time, an increase of 1.7-1.8 per cent on the 3.5 per cent budgeted fiscal deficit target is being anticipated,' Chief Economic Adviser Krishnamurthy Subramanian said on Friday.
While the farmers are not getting remunerative prices for their produce, at the same time they are forced to pay high prices for items they consume.
There are various estimates of India's debt to GDP ratio, but the consensus is that that it would be over 80 per cent at the end of the current fiscal year.
Out of around 80 million accounts that were analysed, there were 10 million records with only names and no other details about the subscribers, including their date of joining, date of birth and father's name, among others, in the EPFO's records.
The railways, the country's largest employer, will be hiring 127,000 people in 2018-2019, for which 23.7 million are competing.
Bankers and economists agree rates will soften, though the quantum would depend on banks' asset-liability profile
After months of denying there was a liquidity problem, Governor Raghuram Rajan has reversed course.
Rapid rise in disposal of corruption cases against govt employees has helped
Some say the MPC will raise the rate, while others are of the view that there is already de facto interest rate tightening through rising bond yields, which might prompt the central bank to go for a pause.
It is a classic case of extremes: The worst contraction in GDP along with the highest-ever levels of cash in the economy; and a severe dent in consumption together with strong growth in bank deposits and digital payments.
Morgan Stanley expects RBI to cut rates sharply rather than "dribble down".
Instead of a rate hike, or even a pause, there could be a window for the RBI for an interest rate cut
Concerned by GDP slowdown and unrealistic tax targets, the economists urged Finance Minister Nirmala Sitharaman to implement long-term structural steps like land and labour reforms. Warning against any off-Budget financing the economists said the government should prepare a statement of intent for its social, rural and welfare sector expenditure.
Reserve Bank of India (RBI) Governor Raghuram Rajan has set himself a target of lowering consumer inflation and is even ready to raise rates to achieve it, risking friction with the new government, if he is seen as overstepping.
'There are a lot of positive things these reforms are bringing about and it is only a matter of some quarters before the growth rate picks up momentum.' 'Until then we need to be a little bit patient.'
Depreciating the rupee against the dollar to boost economic growth has fiscal constraints and monetary limitations
The difference between what the banks play in the US and India is not that of soccer and football but rugby and football. SVB also has a unique character. But when risks are mispriced, the fallout could be very similar, points out Tamal Bandyopadhyay.
The Reserve Bank of India (RBI) booked massive gains on its foreign currency sales and needed to provide much lesser for its reserves in 2020-21 (FY21), helping it to carve out a significant Rs 99,122-crore dividend for the government, revealed the RBI's annual report for FY21. By doing so, the central bank's risk buffers have reduced to the bare minimum, which may restrict some of RBI's scale of operations, and would likely hamper dividend payout for financial year 2021-22, said analysts. The annual accounts are for nine months ended March 31, 2021 since the RBI changed its accounting year from July-June to April-March from FY21.
This permission was given some time late last month, before the Reserve Bank of India (RBI) on March 31 issued the indicative borrowing calendar for the states for April-June and the one for the Centre for April-September.
Though inflation, on the basis of the wholesale price index, is nowhere near the 1990-91 level of 10.26 per cent and India is in a much better position to check it, the greater integration of our economy with the globe has exposed it to a much higher risk of imported inflation.
Economists praise Das for his pragmatism and willingness to face challenges head on. And in doing so with the finesse of an able administrator.
Economists have said if a stimulus is needed it should be different from what was provided in 2008-09, when the economy faced the ripple effects of a global meltdown following the Lehman Brothers collapse.
Slight recovery in growth is expected only in July-September.
Months before 8/11, MP, Haryana probed note ban
Latest official data shows that investment is, in fact, showing signs of a moderate pick-up.
Though it is likely gross domestic capital formation increased in the quarter ended June, against declines in the previous two quarters, a significant revival in investment might take a few quarters more, economists say.
A government can't just take away public money, and the RBI can't extinguish its liability. 'The RBI has to honour the value any time a person with legal and taxed money lays claim on the value.'
RBI is expected to discuss about the impact of GST in its monetary policy.
As yields on 10-year government bonds rose from 6.65% in April 2017 to around 7.50% now, liquidity pressures have increased the cost of funds for housing finance companies.
While Raghuram Rajan has said in the past that other factors, including domestic fundamentals, outweigh the US Fed policy meet, this time it would be different
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 incoming government will have to encourage private investments, bring down cost of capital
The central bank has, so far, cut its repo rate by 125 bps.
Lower inflation, FCNR(B) outflows likely to influence central bank decision
The government is drawing up a relief package for industry with steps such as relaxation of asset-classification norms by banks, thus allowing companies to delay the repayment of loans, and tax holidays for the worst-hit sectors like aviation and hospitality. But it might not be enough to stop more bankruptcies from getting filed.
The theory that all banned notes will come back into the system may not be true. Anup Roy finds out.
If imputed inflation for April and May is used, then you have inflation of over 6 per cent for two consecutive quarters, which is a worrying signal for the RBI.
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