The Budget should undertake further reductions in import tariffs and seriously consider an announcement of India's intention to join one or both of the two Asian mega-regional free trade agreements, suggests Shankar Acharya, former chief economic adviser to the Government of India.
The International Monetary Fund (IMF) on Tuesday slashed India's growth forecast for 2022-23 (FY23) by 80 basis points to 7.4 per cent, citing less favourable external conditions and rapid policy tightening by the central bank. In its update to the April World Economic Outlook, the IMF said that though a global recession in 2022 was ruled out with a growth estimate of 3.2 per cent, the balance of risks was squarely to the downside, driven by a wide range of factors that could adversely affect the global economic performance. "The risk of recession is particularly prominent in 2023, when in several economies growth is expected to bottom out, household savings accumulated during the pandemic will have declined, and even small shocks could cause economies to stall.
Hinting at further relaxation in the capital account convertibility norms, RBI Deputy Governor T Rabi Sankar on Thursday said the country is on the cusp of some fundamental shifts with regard to currency management. India has come a long way in achieving increasing levels of convertibility on the capital account and has broadly achieved the desired outcome for the policy choices in terms of achieving a stable composition of foreign capital inflow, Sankar said while addressing the Foreign Exchange Dealers' Association of India's (FEDAI) annual day meeting. Convertibility refers to the ability to convert domestic currency into foreign currencies and vice versa to make payments for balance of payments transactions.
Fitch Solutions sees RBI keeping benchmark interest rates unchanged during the fiscal to March 2022 following its decision to buy Rs 1 lakh crore of government bonds. "We had initially expected another policy rate cut to arrest the rise in government bond yields since the Union Budget announcement in February. "However, having an explicit bond purchase guidance from the RBI following the announcement of the G-SAP will also achieve a similar effect, if not even be more effective than a rate cut on capping the increase in bond yields," it said in a note. The Reserve Bank of India (RBI) held its policy repurchase (repo) rate unchanged at 4 per cent at its monetary policy meeting on April 7.
Experts disagree with the idea and the Reserve Bank of India (RBI), which has the sole right to print money, is not comfortable with it as well.
Foreign institutional investors added $20.10 billion in equities while they pulled out $7.97 billion from the debt market, resulting in total net flows of $12.13 billion.
The new note having dimension of 66 mm X 135 mm will bear the year of printing on the reverse side, a Swachh Bharat logo with slogan, language panel and the motif of 'Hampi with Chariot'.
The ministry has also asked that the cap of such borrowings is to be set at $500 million (Rs 3,450 crore) for a single company and $1 billion (Rs 6,900 crore) for the entire sector.
Handle cards like you would handle cash.
Prime Minister Narendra Modi wants the Reserve Bank to use Indian paper and ink to print currency notes.
Habib Bank along with state-run National Bank of Pakistan had applied to RBI, India's banking regulator, for starting operations in India, while SBI, PNB and Bank of India had sought appoval for going to Pakistan.
RBI had previously cut repo rate by 0.25 per cent each in January and March.
According to a report by mutual fund tracker Morningstar, India-focused offshore funds and ETFs had witnessed a cumulative net outflow of $1.8 billion during 2012 as against a net withdrawal of $5.4 billion in 2011.
Encouraged by softening inflation, the RBI on Thursday decided to cut the benchmark interest rate by 0.25 per cent to 7.75 per cent with a view to boost growth.
Urjit Patel's reappointment will raise market hopes that Rajan, will also be offered an extension when his tenure ends in September.
India's external firewalls were solid in the form of a healthy reserve position.
While India allows 100 per cent FDI in a large number of the sectors, there is a ceiling on foreign investment in sensitive segments like multi-brand retail, insurance, defence and telecom.
RBI awaits fiscal stance, inflation to cool off to decide on rates.
Rajan said investments should return after initial investor worries over Brexit.
Expressing disappointment over the hike in repo rate by the RBI, India Inc on Friday said a rate cut by the bank would have helped ameliorate sentiments as businesses are "reeling" under a tight liquidity crunch due to high cost of capital.
Says licensing of new banks should be a continuous process instead of the current stop-go system
Our income tax department should bring out monthly bulletin as well as annual reports providing insights into the nature of our direct tax segments, points out R Vaidyanathan.
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