Too many accolades are being showered on RBI Governor, Mr Raghuram Rajan for maintaining status quo in regard to repo rate (rate at which RBI lends money to banks) and cash reserve ratio (CRR) (portion of deposits bank keep with RBI). In view of consumer price index (CPI) spurting to over 11% during November, 2013 and even whole sale price index (WPI) increasing to 7.5%, stakeholders were anticipating an increase in repo rate by a minimum of 0.25%. Mr Rajan has surprised them by not increasing thereby sending them in a celebration mode. However, there is no room for complacency as the under-current of RBI policy statement continues to be hawkish. The Governor has made it abundantly clear that inflation...
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An introduction to the website
Recently, IMF came out with a statement that giving direct cash support to intended beneficiaries would add 0.5% to India’s GDP. That is a big sum Rs 55,000 crores (US$ 10 billion). Dr Rangarajan’s recommendations on ‘doubling’ price of domestic gas from US$ 4.2 per mBtu to US$ 8.0 per mBtu have put fertilizers & power – prime user industries – on tenterhooks. The ‘red lines’ drawn by Mr Chidambaram for reining in fiscal deficit during current fiscal & 3 years till 2016-17 have profound implications for resurrecting economy to high growth trajectory. Mr Pranab Mukherjee in his Budget speech for 2012-13 gave a road-map for containing subsidies (fuel, food & fertilizers) at 2.5% of GDP in that year...
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