{"id":34772,"date":"2018-10-31T13:15:18","date_gmt":"2018-10-31T07:45:18","guid":{"rendered":"https:\/\/blog.forumias.com\/?p=34772"},"modified":"2018-10-31T13:15:18","modified_gmt":"2018-10-31T07:45:18","slug":"waiting-for-the-cut","status":"publish","type":"post","link":"https:\/\/forumias.com\/blog\/waiting-for-the-cut\/","title":{"rendered":"Waiting for the cut:\u00a0"},"content":{"rendered":"<p><a href=\"http:\/\/indianexpress.com\/article\/opinion\/editorials\/waiting-for-the-cut-rbi-urjit-patel-repo-rate-gst-4874680\/\"><span style=\"font-weight: 400;\">Waiting for the cut<\/span><\/a><span style=\"font-weight: 400;\">:\u00a0<\/span><\/p>\n<p><b>Background<\/b><\/p>\n<ul>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Even as the economy slows down, the RBI has left its key policy lending rates unchanged while maintaining a \u201cneutral\u201d monetary policy stanc<\/span> <span style=\"font-weight: 400;\">e.<\/span><\/li>\n<\/ul>\n<p><b>Why did RBI take this step?<\/b><\/p>\n<ul>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">The upside risks to inflation \u2014 rising international oil prices, uncertainties in pricing behaviour of firms post-GST and a patchy monsoon \u2014 did not leave it with many alternatives.<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">RBI refrained from hawkishness due to the extraordinary concerns over growth.<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">The RBI scaled down its growth estimates for 2017-18 from 7.3% to 6.7%.<\/span><\/li>\n<\/ul>\n<p><b>Concerns about the economy<\/b><\/p>\n<ul>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">The loss of momentum in the first quarter of 2017-18 and the first advance estimates of kharif foodgrain production are early setbacks which impart a downside to the outlook.<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">The implementation of the GST so far appears to have had an adverse impact, especially on the manufacturing sector in the short term.<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">This could further delay the revival of investment activity already impacted by the twin balance-sheet problem.<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">A weakening consumer confidence further clouds the horizon.<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">In terms of exports, India lags behind other emerging market peers.<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">There are also risks from the normalisation of monetary policy by the US Federal Reserve later this year.<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">That may well pose the risk of outflows considering that foreign portfolio investment in India has largely been in debt.<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Uncertainty on inflation.<\/span><\/li>\n<\/ul>\n<p><b>What could be done by the government<\/b><\/p>\n<ul>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Speedily resolve the implementation problems linked to GST.<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Get stalled projects off the ground.<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Infusing more capital for banks to enable them to lend to firms, especially small and medium enterprises hurt most by the slowdown.<\/span><\/li>\n<\/ul>\n","protected":false},"excerpt":{"rendered":"<p>Waiting for the cut:\u00a0 Background Even as the economy slows down, the RBI has left its key policy lending rates unchanged while maintaining a \u201cneutral\u201d monetary policy stanc e. Why did RBI take this step? The upside risks to inflation \u2014 rising international oil prices, uncertainties in pricing behaviour of firms post-GST and a patchy&hellip; <a class=\"more-link\" href=\"https:\/\/forumias.com\/blog\/waiting-for-the-cut\/\">Continue reading <span class=\"screen-reader-text\">Waiting for the cut:\u00a0<\/span><\/a><\/p>\n","protected":false},"author":61,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"footnotes":""},"categories":[555],"tags":[],"class_list":["post-34772","post","type-post","status-publish","format-standard","hentry","category-test-1","entry"],"jetpack_featured_media_url":"","views":{"total":0,"cached_at":"","cached_date":1704801818},"jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts\/34772","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/users\/61"}],"replies":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/comments?post=34772"}],"version-history":[{"count":0,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts\/34772\/revisions"}],"wp:attachment":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/media?parent=34772"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/categories?post=34772"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/tags?post=34772"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}