&w=3840&q=100)
FinMin sees room for more rate cuts as inflation remains below RBI's target
Retail inflation, based on Consumer Price Index (CPI), has remained below 4 per cent since February and dipped further to more than six-year-low of 2.82 per cent in May.
"Core inflation remains subdued, and overall inflation is comfortably below the RBI's 4 per cent target, affording room for the easing cycle to be sustained," said the finance ministry's monthly review report.
The central has cumulatively reduced the short-term benchmark lending rate (repo) by 100 basis points since February.
The next meeting of the RBI's rate-setting panel -- Monetary Policy Committee (MPC) -- during August 4-6.
The RBI has projected headline inflation at 3.4 per cent for the second quarter of the fiscal year, while in the first quarter, actual inflation came below the target of the RBI.
"It appears likely that the full fiscal year inflation rate would undershoot the central bank's expectation of 3.7 per cent," the report said.
It further said global crude oil prices are expected to remain subdued, following a larger-than-anticipated production hike by OPEC and its allies, who raised output by 5,48,000 barrels per day in August, on top of the production increases announced for the previous months.
On the fiscal front, both the Union and state governments have maintained momentum in capital expenditure while adhering to consolidation goals.
The revenue sources remain buoyant despite the tax cuts, continuing on the double-digit growth path, the report said.
The government has mandated the RBI to ensure inflation remains at 4 per cent with a margin of 2 per cent on the either side.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Time of India
31 minutes ago
- Time of India
Buying property abroad with international credit cards may put you in regulatory crosshairs
Mumbai: Many Indians are trying to get out of a pickle after buying homes in Dubai with their international credit cards (ICCs). They clicked on payment links shared by overseas builders, and sometimes swiped the cards on visits to the UAE to make down payments and later pay off the balance in tranches. It was quick and convenient-no dealing with the bank branch or filling up forms. Besides, they thought they would escape the high 20% tax-collected-at-source (TCS) in case banks manage to put in place a system to collect it. Explore courses from Top Institutes in Please select course: Select a Course Category Public Policy Data Science Product Management Degree healthcare Operations Management Technology Healthcare MCA Artificial Intelligence PGDM Management Design Thinking Project Management Cybersecurity others Leadership Data Analytics Data Science CXO Digital Marketing Others MBA Finance Skills you'll gain: Duration: 12 Months IIM Calcutta Executive Programme in Public Policy and Management Starts on undefined Get Details Ill-advised and unwittingly, they used the ICC for which it is not meant to be: capital account transactions like purchase of immovable property and stocks. ICCs, like local cards, are intended to only facilitate current account transactions like buying books, downloading movies, booking hotels while at home or on a foreign tour. by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like This Could Be the Best Time to Trade Gold in 5 Years IC Markets Learn More Undo There is no regulation that in as many words bans the use of ICC to buy properties abroad. But bankers and practitioners consider this a violation based on Reserve Bank of India ( RBI ) notifications. Now, to get the income tax (I-T) office and the enforcement off their back, the property buyers are trying to fix the error. How? By entering into another arrangement with the builders: these investors are preparing to remit fresh funds to builders under the RBI's Liberalised Remittance Scheme (LRS) while cancelling the earlier credit card transaction on the grounds that it was a mistake. Once done, they would receive a refund from the builder. Otherwise, they would have to sell the property and bring back the money. Live Events "Indian residents who have unintentionally paid money through credit card for purchase of property outside India need to approach RBI to regularise their mode of payment. RBI should take a lenient view as the money paid through credit card is a legitimate payment and only the mode of payment was wrong. The regulator should compound the contravention if applied for and need not ask to unwind the transaction or sell the property," said Rajesh Shah, partner at the CA firm Jayantilal Thakkar & Co. Compounding involves a person paying a fine after accepting the violation. Some of the buyers are reluctant to approach the regulator, preferring to lie low after cancelling the earlier credit card transaction. CARD USE-WHERE & WHAT The LRS allows a resident individual to transfer $250,000 a year to buy assets abroad as well as shop online from India. Under the rules, when a person uses ICC from India to buy stuff online from foreign sellers, the spend is part of the LRS limit. Such current account expenses while travelling abroad are excluded from LRS. (Perhaps, those who wiped their cards for an apartment during a trip to the Emirates mistakenly believed the expense would not consume their LRS limit). However, paying with the ICC for overseas property purchase is not considered within the regulations, irrespective of whether the card is used in India or abroad. It is understood that payments for such acquisitions must be through banking channels.
India.com
4 hours ago
- India.com
RBI To Stop Rs 500 Notes In ATMs? Here's What Govt Said
New Delhi: The government on Sunday termed "untrue" a WhatsApp message that claimed the Reserve Bank of India (RBI) had ordered banks to cease issuing Rs 500 notes via ATMs by September 30, saying no such instruction has been issued. The deceptive message also claims that 90 per cent of ATMs will cease issuing Rs 500 notes by March 31, 2026, and 75 per cent will do so by September 30. Additionally, it advises people to begin "liquidating" their Rs 500 notes and implies that only Rs 100 and Rs 200 notes will be accessible through ATMs in the future. Responding to the message, the government media arm Press Information Bureau's Fact Check unit said that the RBI has not issued any such instructions, and Rs 500 notes are still legal tender. In a post on X, it clarified that the widely shared claim is untrue and advised people not to believe such false information. "Has RBI asked banks to stop disbursing Rs 500 notes from ATMs by September 2025? A message falsely claiming exactly this is spreading on #WhatsApp. #PIBFactCheck, No such instruction has been issued by the @RBI, Rs 500 notes will continue to be legal tender," the post said. The Fact Check Unit stressed the significance of confirming any financial updates from official sources and cautioned that such messages are intended to deceive. "Don't fall for such misinformation. Always verify news from official sources before believing or sharing it!" it stated. A similar claim went viral on social media last month. The previous message, which was widely shared on WhatsApp as well, implied that the RBI had a phased plan to stop issuing Rs 500 notes to ATMs by 2026. PIB Fact Check had denied the allegation at that time as well, claiming that no such directive had been issued. Authorities have emphasised the importance of exercising caution when consuming and disseminating unconfirmed information. Users are advised to rely only on reliable sources, such as the RBI's official communications or PIB's fact-checking handle, for any updates regarding currency, as misinformation about it has become more prevalent.
New Indian Express
5 hours ago
- New Indian Express
Tariff tantrums have economists betting RBI biting rate-cut bullet again
MUMBAI: The 25% export duty shocker from the US effective August 7, which if not reversed to a reasonable level may shave off 20-30 bps from this year's growth, has the Mint Road-watchers divided with some calling for a monetary support given the below-target inflation prints while some others calling for caution till the tariff talks are completed. The Reserve Bank-led monetary policy committee begins its bimonthly meeting on Monday and the policy decisions will be announced on Wednesday. The RBI has already cut the policy repo rate by a 100 bps since February with the last meeting delivering an unconventional 50 bps to 5.5%. On July 30, US president Donald Trump unexpectedly announced a 25% flat tariffs on Indian goods along with an unspecified additional penalty on India's energy and military purchases from Russia. The announcement came as a shocker to New Delhi as five rounds of trade talks have been completed and the sixth round is slated for August 25 in the Capital. What was more shocking was that the new tariffs are much more than anticipated and leave Indian goods at a great disadvantage to many of its market rivals. While economists at British brokerage Barclays see the tariff impact to shave 30 bps off GDP this fiscal—RBI has pegged it at 6.5% this fiscal, foreign agencies like the IMF and the Asian Development Bank have pegged it marginally lower at 6.4% and 6.5% respectively, domestic rating agency Icra and Japanese brokerage Nomura have pegged it at 20 bps bringing down growth to 6% this year.
