Skip to main content

RBI’s Acharya suggests shift in monetary policy stance, show minutes

By
RBI’s Acharya suggests shift in monetary policy stance, show minutes
One member of the Reserve Bank of India’s (RBI’s) rate-setting panel suggested starting the process of shifting the monetary policy stance from neutral to “withdrawal of accommodation”, increasing the odds of a rate hike this year.
Noting the upside risks to inflation, Viral Acharya, RBI deputy governor, said he is likely to shift decisively to vote for a beginning of “withdrawal of accommodation” at the next Monetary Policy Committee (MPC) meeting in June.
“Reinforcement of inflationtargeting credibility that such a shift would signal is crucial in my view for prudent macroeconomic management, on both the domestic and external sector fronts,” he said
According to Gaurav Kapur, chief economist at IndusInd Bank, a combination of risk factors, both on the demand and supply side, should play out for changing the monetary policy stance to restrictive from neutral. “Such a shift is unlikely in June because there may not be adequate information. However, going by the projected inflation path, probability of a rate hike in August has increased,” he said.
Rupa Rege Nitsure, group chief economist at L&T Financial Services, said it will be prudent if MPC members wait to see firmer signs of sustainable growth before withdrawing the accommodation.
“After considering the major seasonal and structural factors, we do not see inflation emerging as a major macro risk until oil prices cross $75 level. Muted consumption demand in urban belts and curtailed lending capacity of PSBs to MSMEs may most probably throw a negative surprise on the growth front,” she said.
On 5 April, MPC decided to keep rates on hold with 5 of the 6 members voting in favour of the decision. Michael Patra, executive director of RBI, called for a 25 basis points hike in the repo rate, the rate at which the central bank infuses liquidity into the banking system. In the policy, RBI said there are several uncertainties surrounding the baseline inflation path. This included impact of the revised formula for minimum support prices (MSP) and staggered implementation of house rent allowance (HRA), volatility in crude oil prices, and rise in input prices by firms. It had also said that there are risks in case of further fiscal slippage and should the monsoon turn deficient.
The latest data shows retail inflation decelerated for the fourth consecutive month to 4.28% in March on the back of softening food prices.
The Mint, New Delhi, 20th April 2018
---------------

Comments

Post a Comment

Popular posts from this blog

New income tax slab and rates for new tax regime FY 2023-24 (AY 2024-25) announced in Budget 2023

By
  Basic exemption limit has been hiked to Rs.3 lakh from Rs 2.5 currently under the new income tax regime in Budget 2023. Further, the income tax slabs in the new tax regime has been changed. According to the announcement, 5 income tax slabs will be there in FY 2023-24, from 6 income tax slabs currently. A rebate under Section 87A has been enhanced under the new tax regime; from the current income level of Rs.5 lakh to Rs.7 lakh. Thus, individuals opting for the new income tax regime and having an income up to Rs.7 lakh will not pay any taxes   The income tax slabs under the new income tax regime will now be as follows: Rs 0 to Rs 3 lakh - 0% tax rate Rs 3 lakh to 6 lakh - 5% Rs 6 lakh to 9 lakh - 10% Rs 9 lakh to Rs 12 lakh - 15% Rs 12 lakh to Rs 15 lakh - 20% Above Rs 15 lakh - 30%   The revised Income tax slabs under new tax regime for FY 2023-24 (AY 2024-25)   Income tax slabs under new tax regime Income tax rates under new tax regime O to Rs 3 lakh 0 Rs 3 lakh to Rs 6 lakh 5% Rs 6
Post a Comment
Read more

Jaitley plans to cut MSME tax rate to 25%

By
Income tax for companies with annual turnover up to ?50 crore has been reduced to 25% from 30% in order to make Micro, Small and Medium Enterprises (MSME) companies more viable and also to encourage firms to migrate to a company format. This move will benefit 96% or 6.67 lakh of the 6.94 lakh companies filing returns of lower taxation and make MSME sector more competitive as compared with large companies. However, bigger firms have shown their disappointment since the proposal for reducing tax rates was to make Indian firms competitive globally and it is the large firms that are competing globally. The Finance Minister foregone revenue estimate of Rs 7,200 crore per annum for this for this measure. Besides, the Finance Minister refrained from removing or reducing Minimum Alternate Tax (MAT), a popular demand from India Inc., but provided a higher period of 15 years for carry forward of future credit claims, instead of the existing 10-year period. “It is not practical to rem
1 comment
Read more

Don't forget to verify your income tax return in August: Here's the process

By
  An ITR return needs to be verified within 120 days of filing of tax return. Now that you have filed your income tax return, remember to verify it because your return filing process is not complete unless you do so. The CBDT has reduced the time limit of ITR verification to 30 days (from 120 days) from the date of return submission. The new rule is applicable for the returns filed online on or after 1st August 2022. E-verification is the most convenient and instant method for verifying your ITR. However, if you prefer not to e-verify, you have the option to verify it by sending a physical copy of the ITR-V. Taxpayers who filed returns by July 31, 2023 but forget to verify their tax returns, will get the following email from the tax department, as per ClearTax. If your ITR is not verified within 30 days of e-filing, it will be considered invalid, and may be liable to pay a Late Fee. Aadhaar OTP | EVC through bank account | EVC through Demat account | Sending duly signed ITR-V through s
Post a Comment
Read more