×

UPSC Courses

DNA banner

DAILY NEWS ANALYSIS

  • 05 October, 2019

  • 3 Min Read

A welcome move, but it’s unlikely to spur demand

A welcome move, but it’s unlikely to spur demand

News

With the 25 basis points (bps) rate cut, RBI returned to the conventional wisdom of a rate change in multiples of 25bps.

RBI statement

  • MPC decided to continue with an accommodative stance as long as it is necessary to revive growth while ensuring that inflation remains within the target.
  • RBI’s decision to increase the household income limit for borrowers of NBFCs and MFIs is welcome. It will enhance credit delivery to a larger customer base at the bottom of the pyramid.
  • There is an attempt to boost the domestic forex derivatives market. RBI has decided to allow domestic banks to offer foreign exchange prices to non-residents on a 24-hour basis.

Efficacy of rate cuts:

  • This may push the debt markets to take a cue from the second-generation policy signals and yields may soften from the current level.
  • Efficacy of rate cuts is questionable against elevated household leverage, deteriorating company fundamentals, and weak demand.
  • The number of downgrades in H1FY20 grew by 66% vis-à-vis a 20% de-growth for the number of upgrades. The pace of downgrades has been increasing.
  • Financial flows to the commercial sector in H1FY20 are significantly lower due to a decline in funding from banks and non-bank sources.
  • Despite a rising interest scenario, credit had expanded by over 1.65 trillion but contracted by 93,700 crores even as we are in an aggressive rate cut cycle. This indicates credit risk aversion continues to play centre stage for the non-bank sector.

Fiscal policy:

  • Centre has done a remarkable job in maintaining fiscal consolidation.
  • We are increasingly concerned about the fiscal position of the states.
  • Way ahead

    More clarity is needed to crystallize the KYC requirements for off-shore entities as also their tax implications.

    In the current context, only monetary policy rate cuts would not work in isolation. It must be complemented by fiscal expansion

Source: Live Mint


World bank logistic performance index 2023

India is now ranked 38th out of 139 nations in the Logistic Performance Index (LPI) 2023 of the World Bank. From its previous rankings of 44th in 2018 and 54th in 2014, this is a notable improvement. Earlier, the Logistics Ease Across Different States (LEADS) Report 2022 was published by the Ministry of Commerce and Industry. About Logi

Smuggling of Gold

Airports discovered more than 63% of this illegal gold. The Department of Revenue Intelligence recently conducted the Golden Dawn Operation across India, seizing 101.7 kg of illegal gold valued at Rs 51 crore. Despite the fact that India receives a legal import of about 800-1,000 tonnes of gold each year, the illicit market is thought to be

India-Thailand Relations

Both parties expressed satisfaction with the ongoing bilateral defence cooperation at the 8th India-Thailand Defence Dialogue, which was held in Bangkok, Thailand. Cultural ties and mutual cooperation that have been shaped by thousands of years of lasting historical and cultural ties characterise India and Thailand relations. Highlight

Translocation of Elephants

The Kerala government's appeal of the order of the Kerala High Court is rejected by the Supreme Court. The Kerala government's appeal against the Kerala High Court's directive to move Arikomban (Wild Elephant), the "rice tusker" of Munnar, to the Parambikulam tiger reserve was recently dismissed by the Supreme Court.

Global Buddhist Summit

Global Buddhist Summit In order to improve diplomatic and cultural ties with other nations, the Ministry of Culture recently organised the First Global Buddhist Summit 2023 in collaboration with the International Buddhist Confederation (IBC). About the summit "Responses to Contemporary Challenges: Philosophy to Praxis" is

Toppers

Search By Date

Post Feed

Newsletter Subscription
SMS Alerts

Important Links