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
The interim dividend will help Narendra Modi-led government partly bridge the deficit its budget had developed after the announcement of a Rs 75,000 crore a year cash dole scheme for small farmers.
Today, with growth having slowed and macro-economic challenges in every direction, would the government have benefited from the advice of 'Harvard' economists? asks T N Ninan.
North Block and Mint Road seem likely to now stick to the earlier convention of the RBI governor coming to Delhi and being the only MPC member meeting the finance minister and senior bureaucrats on pre-policy meetings
The move will to a large extent speed up the monetary transmission process--which is banks passing on the rate cuts that the Reserve Bank announces to their borrowers without much delays--something that has been missing all these while and something that the RBI has been unhappy with.
A two-year extension at the helm of the RBI still looks a real possibility
Bank of America Merrill Lynch on Monday trimmed India's economic growth estimates by 30 basis points to 7.1 per cent for the current fiscal, while global financial services giant Morgan Stanley downgraded its GDP growth forecast for the current fiscal to 7.3 per cent from the earlier 7.7 per cent.
Market breadth depicted gains with 1,476 advances over 1,403 declines on the BSE. 140 stocks remained unchanged.
Piyush Goyal, who held the post of finance minister when Arun Jaitley was undergoing treatment, told the Confederation of Indian Industry's annual session: "All stakeholders, including the RBI, should introspect on their respective roles (on low economic growth)."
Of the 40 CEOs polled from across the country, 60 per cent identified a fractured electoral mandate as a bigger risk than trade wars, volatile oil prices, and inflation.
The RBI is not statutorily independent from the government but has long enjoyed wide latitude
RBI Governor Raghuram Rajan on Friday pitched for incentivisation of domestic savings to boost investments in the country.
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.
'Those who come from outside are surprised at the relatively small strength of the RBI supervisory cadre, relative to the needs of the country and the needs of the financial sector.'
'We feel there is definitely something murky in the system.' 'Will anyone believe that Nirav Modi will go to a branch and bribe a low-level officer?' 'Just look at the people with whom he had moved around.'
A staunch defender of demonetisation, it would be interesting to see how he handles the government's increasing demand for more cash from the RBI, and letting some weak banks get out of prompt corrective action.
The move will likely attract more retail investors.
If the new governor can think out of the box even as he signals that he can bat for the RBI cadre and respect its institutional memory, that will go a long way in getting out of the current impasse.
Reserve Bank of India Deputy Governor Viral Acharya is the eighth economist to quit since the Modi government took office.
Instead of a rate hike, or even a pause, there could be a window for the RBI for an interest rate cut
'GIFT City is now on a growth trajectory,' says Tapan Ray, MD and group CEO, GIFT City, 'The time has come for the GIFT City to take the big leap and emerge as the next financial hub of Asia.'
According to the final recommendations of an expert committee, the weight of primary (unprocessed) food items will go down by 0.5-1.0 percentage points in the new series compared to the current one
However, RBI would continue to nudge banks to cut lending rates
The HR challenge seems to be one of the most important issues that RBI Governor Shaktikanta Das will have to tackle.
The trolls on Twitter, the rumour mongers on WhatsApp and the serial abusers on Facebook are the enemies of social media.
'The Jalan Committee has now provided very clear guidelines on how the (RBI's) balance sheet should be looked at, what kind of disclosures should be made, what are the principles on which the Contingency Risk Buffer should be maintained, what should be the revaluation reserves, and the market risk to the Contingency Risk Buffer.'
Chidambaram questioned the Narendra Modi government whether its demonetisation decision was designed to convert black money into white.
'PNB had confirmed compliance with the RBI's prescription in its circular of August 3, 2016, which has now turned out to be factually incorrect,' Minister of State for Finance Shiv Pratap Shukla said in Rajya Sabha on Tuesday.
'I am sure Dr Patra will get the fullest cooperation from the finance minister who needs workhorses, not prima donnas constantly looking to improve their CVs,' says T C A Srinivasa-Raghavan.
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.
A representative of the Confederation of ATM Industry said ATM players were not consulted about the move and they received the news via media platforms.
The final and most significant reset in the relations between the government and the RBI is the manner in which the process of appointing the governor and deputy governors of the central bank has been changed.
'A bit of foresight would have helped.' 'Isn't it common sense that this is sowing and wedding season?' 'The plan is indeed unquestionably revolutionary, but better preparedness could have avoided such teething troubles.'
Monetary policy stance to depend on inflation data
RBI data show one-fifth of all the infrastructure loans are stressed and the share of such loans in overall stressed assets is nearly a third.
Money permits patronage. Money means power. No wonder details of the crores locked up in NPAs and never repaid loans are top secret, Sunanda K Datta-Ray.
Hardening prices of manufactured items during the month may refrain the Reserve Bank of India from cutting rates in its policy review on February 8.
'He (Modi) thinks as if he is a tiger, and the only one who is right,' Mamata said.
In case the repo rate keeps trending downwards, borrowers can expect a downward revision of their MCLR-linked loans.
Jaitley said it is no surprise that Dr Manmohan Singh is unhappy as 'maximum black money was generated' under his rule.
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