A moderate GST rate obviates the need for the two-rate structure.
Reducing policy rates is not enough. The key is to ensure banks lend to credit-constrained borrowers.
In the near term, two key factors are the outcome of the monsoon season in respect to cropping yields; and the correction in the crude oil price.
.jpg)
CII hopes that the RBI would not wait for the next quarterly review but intervene sooner if the economic condition warrants a mid-course correction.
Group still far from coordinating monetary/forex policy
It is high time to manoeuvre the rupee more effectively and predictably, even as it has to be recognised that such tweaking of the rupee needs to be accompanied by reforms to the real sector and factor markets.
According to official figures, retail inflation in June touched its lowest mark at 7.31 per cent since January 2012.
RBI's surprise rate cut has revived sentiments of India Inc.
Governor's statements will be weighed to gauge confidence level.
Since last month, the realty (down 23%), auto (down 16%) and finance (down 14%) indices have underperformed the market by falling over 13%, as against 8% decline in the benchmark indices
Are we adopting an idea whose time has come and gone? My feeling is, yes, says ex-banker C Joseph Chacko in the fourth article of the series on inflation targeting.
Benchmark 10-year bond yields hit a 13-month peak as bond traders priced in more aggressive monetary easing next year.
'When a soldier becomes a king, he better be a king. He should now just forget the past and move beyond continuity. He should catch the potential of India's moment and play a leader's role,' says Vallabh Bhansali of Enam Group.
The public sector banks are not in a position to cut rates because of their weak balance sheets and massive portfolios of non-performing assets, says Devangshu Datta.
CPI-based inflation on a (year-on-year) basis has come down from 8.59 per cent in April 2014 to 7.80 per cent in August 2014.
.jpg)
It also painted a grim possibility of any major gains in the rupee during the current fiscal saying that the continuing global volatility, and domestic political uncertainty ahead of the 2014 hustings will limit chances of any significant appreciation apart from further impact growth.
The panel was set up to suggest ways to reform India's monetary policy.
Most Asian currency and equity markets too suffered steep losses due to US rate hike fears.
It is time to take a few macroeconomic risks to kick start the growth.
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.
'People who come from IMF-World Bank backgrounds have no dynamism at all,' Subramanian Swamy said.
Two members recommended bringing down the rate by 50 bps in the April policy.
Cascading effect of rising raw materials will result in inflation, high rates, slow capex
Although the current long-term bullish trend is intact, markets are awaiting clarity on the taper and the Assembly election results.
Analysts are expecting inflation to fall further in October and November on base effect. Inflation measured by consumer prices has been trending down for over four months, and came in at 6.7 per cent in September.
Global investors are fast losing appetite for equities, as deflation seems more of a reality. With commodity prices collapsing, few safe havens are left for investors, with many of the BRICS(Brazil, Russia, India, China and South Africa) losing their charm.
His tweets led to his followers proclaiming that he was backing Patel's appointment
The Reserve Bank had kept policy rate unchanged in its review on April 7.
For August, CRISIL core inflation indicator stood at 3.6 per cent, a tad higher than RBI's measure.
Market participants must appreciate that staying cautious is a virtue for central bankers and should not expect a sudden reversal in the formal monetary policy stance.
French bank BNP Paribas' wealth management arm said it expects the economy to expand by 4.3 per cent this fiscal and the growth to pick up and touch 5.1 per cent in FY15.
Nobutaka Kitajima, chief investment officer -- equity, LIC Nomura Mutual Fund, tells Business Standard the reaction to the Fed's statements has been overdone and the current downturn has punished certain stocks much more than their inherent economic worth and business potential.
The central bank has lowered its policy rate twice so far in 2015.
Industrial production (IIP) grew to a three-year high of 6.4 per cent in August, up from 4.1 per cent in July.
Rajan expressed concerns on pressures on the services front.
The Reserve Bank in its first mid-quarter policy review on Monday kept the key interest rates unchanged because of elevated food inflation, rupee depreciation and uncertainty over foreign fund inflows.
'Power sits lightly on Arun Jaitley's shoulders. Just because earth-shaking election results have brought his party in power, he has not gone recklessly ambitious. "Too soon, too fast" is not what he likes,' says Sheela Bhatt/Rediff.com about Budget 2014.
'It is only fear and speculation, without much substance, that has led to the fall.'
Wednesday's hawkish and essentially courageous decision underscores that Governor Urjit Patel will largely represent continuity, rather than a break, with the policies and approach of his predecessor, says Richard Iley.
Finance Minister expects rate cut by RBI.
