The Reserve Bank is unlikely to ease the benchmark policy rate during 2024 given the uncertainty over food inflation, State Bank of India (SBI) chairman C S Setty has said. The US Federal Reserve's first cut in interest rates in more than four years is expected soon, triggering central banks in other economies to follow suit. "On the rate front, a lot of central banks are taking independent calls.
The central government is on track to meet its fiscal deficit target of 6.4 per cent of the GDP for 2022-23 on the back of strong growth in revenue collections, the World Bank said in its India Development Update on Tuesday. High nominal GDP growth in the first quarter supported strong growth in revenue collection, especially Goods and Services Tax (GST), despite tax cuts on fuel. Notwithstanding an increase in spending due to expanded fertilizer subsidies and food subsidies for vulnerable households in response to the commodity price shock, the government is on track to meet its FY22/23 fiscal deficit target of 6.4 per cent of GDP and the general government deficit is projected to decline to 9.6 per cent from 10.3 per cent in FY21/22 and 13.3 per cent in FY20/21.
He will be the eighth Deputy Governor to be made Governor at RBI
The Reserve Bank is unlikely to cut the benchmark interest rate in its forthcoming bi-monthly monetary policy review later in the week as retail inflation is still a cause of concern, and there is a possibility of the Middle East crisis deteriorating further, impacting crude oil and commodity prices, say experts.
Renewed inflationary pressures, led by a spike in prices of vegetables and cereals, have cast a spell on the equity markets in the past month. The BSE Sensex and Nifty50 have declined up to 2 per cent each during the period, clipping the 13 per cent rally from the March lows, shows data from ACE Equity. Investors typically consider shares of fast-moving consumer goods (FMCG) companies as defensive bets, putting their weight behind them in a falling market.
Government's effective supply-side measures and commendable commitment to fiscal consolidation will have a salutary impact on inflation, says the RBI report.
Finance Minister Nirmala Sitharaman on Wednesday said the government is keeping an eye on inflation which is purely "extraneous" nowadays because of fuel and fertiliser prices. Replying to the debat on the Supplementary Demands for Grants in the Rajya Sabha, the minister said wholesale inflation has fallen to a 21-month low. Later, the Rajya Sabha returned the Supplementary Demands for Grants to the Lok Sabha, thus completing the process of authorising the government to spend an additional Rs 3.25 lakh crore in FY2022-23.
The Delhi government's Anti-Corruption Branch (ACB) has registered a case against former PWD minister and senior AAP leader Satyendar Jain over alleged corruption in a Rs 571-crore CCTV project. According to the ACB, Jain allegedly accepted a bribe of Rs 7 crore to waive the liquidated damages penalty of Rs 16 crore imposed on Bharat Electronics Limited (BEL). The project, which was executed when he was a PWD minister in the previous Arvind Kejriwal government, was related to the installation of 1.4 lakh CCTV cameras across all 70 assembly constituencies.
Dr Nagesh Kumar, one of the three new MPC members, wanted the MPC to reduce the repo rate by 25 basis points to 6.25%.
From the outcome of the general elections and then Union Budget to tepid corporate earnings in the September 2024 quarter (Q2-FY25), sticky inflation and Reserve Bank of India's stance on interest rates, extreme weather conditions, Indian stock markets have braved it all in calendar year 2024.
The deportation of Indians from the United States, deaths in the Maha Kumbh stampede and the joint Parliamentary committee report on the Waqf bill were among the issues that led to heated exchanges and some disruptions in an otherwise smooth first part of the Budget session that ended on Thursday.
After a strong run in the midcap and smallcap indices, which surged 46 per cent and 43 per cent, respectively, on the National Stock Exchange (NSE) during Samvat 2080, analysts suggest that the rally in these segments may pause to catch its breath in Samvat 2081.
Progress on monsoons along with favourable base effect in 2HFY2017 continues to point towards RBI achieving its near 5 per cent inflation target by the year-end
Following the lacklustre growth numbers in the second quarter (Q2FY25), economists believe the upcoming Union Budget for 2025-26 should focus on reforms that will stimulate consumption, manufacturing and spur employment. India's growth unexpectedly slowed to 5.4 per cent in the second quarter, due to low capital formation, weak consumption, besides adverse weather impact.
Deputy Governor Michael Patra warned about the spillover effects of food inflation.
'2025 is the year to build a portfolio for the future. Focus this year should be on valuations and visible growth.'
RBI said more monetary transmission to support growth continues to be critical.
'The BJP lacks a credible mass leader who matches Mamata Banerjee's popularity.' 'Given the division of votes among Opposition parties, the West Bengal government's dole-giving strategy, and the consolidation of the poor, significant sections of scheduled caste groups and Muslim minorities behind the ruling party, it will be difficult to dislodge the Trinamool from power.'
The BJP government in Gujarat has formed a five-member committee, headed by a retired Supreme Court judge, to assess the need for the Uniform Civil Code (UCC) in the state and to draft a bill for the same. The committee will submit its report within 45 days. The decision has sparked debate with the Opposition claiming it is an attempt to divert attention from pressing issues ahead of the upcoming local body polls, while the government insists the UCC will protect the rights of tribal communities. The committee will consult with religious leaders, including those from the Muslim community.
Among the 30 Sensex firms, Asian Paints, Infosys, JSW Steel, UltraTech Cement, Power Grid, Larsen & Toubro, HCL Technologies and Tata Steel were the biggest laggards. Tata Motors, HDFC Bank, Bharti Airtel, ITC, IndusInd Bank and Axis Bank were the gainers.
Clouding the inflation outlook is the recommendation of the 7th pay panel for an average 24 per cent pay hike for millions of its employees, which would lift demand-driven price pressures.
As the poverty rates in the country declined below 5 percent in 2024, a research study by State Bank of India also highlighted that the extreme poverty in the country has been reduced to minimal.
Seeking to guard investor returns from excessive exchange rate movements, RBI Governor Raghuram Rajan on Thursday said a move towards an inflation target of 4 per cent will help contain the currency market volatility.
The Reserve Bank of India's (RBI's) State of the Economy report for October acknowledged a slowdown in some high-frequency indicators but expressed confidence in a recovery, aided by consumption demand during the festival season. "In India, aggregate demand is poised to shrug off the temporary slowdown in momentum in the second quarter of 2024-25 as festival demand picks up pace and consumer confidence improves," said the report released on Monday.
He warned low interest rates globally could distort markets and would be difficult to abandon
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In twin blows to Indian economic revival, higher food prices drove retail inflation to a five-month high of 7.4 per cent while factory output fell for the first time in 18 months. The second consecutive month of rise in consumer price index (CPI)-based inflation will add to the pressure on the Reserve Bank of India (RBI) to again raise interest rates to tame high prices. Inflation has been above the targeted zone for the ninth month in a row and as per statute, the RBI will now have to explain to the government in writing why it failed to keep prices below 6 per cent.
Goyal said India has been recognised as brightest spot in the world in last five years.
Union Finance Minister Nirmala Sitharaman on Monday said people are finding current interest rates "very stressful" and urged banks to make them affordable. Speaking at an event organised by State Bank of India, the finance minister said that at present, India requires industry to ramp up and invest in new facilities, and added that lowering lending rates can help achieve the "Viksit Bharat" aspiration.
The US Fed rate cut of 50 basis points is unlikely to have any significant impact on foreign inflows into India, Economic Affairs Secretary Ajay Seth said on Thursday. He said the US Federal Reserve has done what it assesses is good for the largest economy in the world, but the RBI will take a decision on interest rate cut keeping the Indian economy in mind. "It is a positive for the global economy, including the Indian economy. "It is a 50 basis points cut from a high level.
The first reason is that prices are bound to rise because there will always be several demand-supply mismatches in the economy.
To ease the potential liquidity stress, the Reserve Bank on Friday slashed Cash Reserve Ratio (CRR) by 50 basis points to 4 per cent, a move that would unlock Rs 1.16 lakh crore bank funds. The RBI on May 4, 2022 had raised CRR to 4.5 per cent from 4 per cent in an off-cycle Monetary Policy Committee (MPC) meeting, with effect from May 21 the same year.
Owaisi criticized the court-ordered survey of a Mughal-era mosque in Sambhal, Uttar Pradesh, saying it weakens India and distracts from real issues like inflation and unemployment.
The annual consumer price inflation eased more than expected to a 24-month low of 8.79 percent in January, helped by moderating food prices, government data showed on Wednesday.
Rural inflation running higher than urban: HSBC
'Investors can consider staying invested in long duration products as there is a possibility of rate cuts in the near term.' Positive macros - lower inflation, high forex reserves and favourable demand-supply dynamics for government bonds - make a strong case for rate cuts from December, says Devang Shah, head of fixed income, Axis Mutual Fund. In an interview with Abhishek Kumar in Mumbai, Shah says this view may not hold true if commodity prices go up sharply.
Activist short-seller Nathan Anderson, known for his high-profile campaigns against the likes of Adani Group, said he is closing his firm, Hindenburg Research, not because of any threat -- legal or otherwise -- and that he stands by all its reports.
Rajan said that even though inflation has breached the 6 per cent mark as against the RBI target of getting it down to 5 per cent by March 2017, the price rise scenario will ebb in future
