GoI announces the sale of two dated securities for a notified amount of ₹25,000 crore
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The Hindu
24 minutes ago
- The Hindu
Time for action: On the RBI pausing rate cuts
The Reserve Bank of India's (RBI) Monetary Policy Committee was sensible to pause its rate cuts, as announced on Wednesday (August 6, 2025). RBI Governor Sanjay Malhotra rightly pointed out that the uncertainties surrounding tariffs are still evolving, and that the 100 bps of rate cuts implemented since February 2025 are still percolating through the system. Mr. Malhotra's statement was made before U.S. President Donald Trump approved an additional 25% tariff on imports from India, over and above the existing 25% reciprocal tariffs. However, his assessment that the matter is far from over was nevertheless accurate. India is still in the process of negotiating a Bilateral Trade Agreement with the U.S., and the final tariffs are far from decided. In the meantime, Mr. Trump has already indicated that similar additional tariffs — 'penalties' for buying oil from Russia — may be imposed on other countries as well, which will impact India's comparative advantage. Leaving room for another rate cut later in the year when things might be clearer, thus, was the sensible thing to do. The other broad reason why the pause makes sense is that it allows the RBI to see whether such monetary measures are working. A 100 bps cumulative cut in rates over the last six months is significant, and the banking system needs time to pass that on to borrowers. The Governor also pointed out that there is ample liquidity in the system, which means the banks have the money to lend. The question, however, is whether there is enough growth-related borrowing happening. RBI data show that, as of end-June, loans to purchase consumer durables had contracted about 3% compared to the previous year. Growth in housing loans slowed sharply to 9.6% from 36% a year earlier, while vehicle loans too slowed by five percentage points over the last year. In line with this subdued demand outlook, companies too seem to be slowing their borrowing. Loans to industry grew 5.5% in June 2025, down from 8.1% in June last year. Simply reducing rates, therefore, is not enough and that is something the Governor alluded to when he said stronger policy frameworks 'across domains, and not just limited to monetary policy', would be pivotal in achieving India's growth potential. The government has to intervene in a more focused manner than just increasing capital expenditure across the board. A lot can be done through tax. The Goods and Services Tax rate rationalisation, that was promised several times, is long overdue. A reduction in fuel prices in line with lower oil prices, too, will lift consumer sentiment. The RBI can, for the moment, afford to wait things out. The government does not have this luxury.
The Hindu
24 minutes ago
- The Hindu
Letters to The Editor — August 8, 2025
More tariffs For the U.S. President, friendship with India seems to be substantially different from his presidential decisions (Front page, August 7). For all the bonhomie with New Delhi, the U.S. continues to treat India as a secondary power. India may have to accept that Mr. Trump will arm-twist countries to force them to fall in line with his policies. If New Delhi can get the tariff hike postponed it would give it elbow room to manoeuvre. A.V. Narayanan, Chennai Is the U.S. trying to derail India's economic standing? Mere expressions of verbal protest are not enough. The Government of India must respond firmly and decisively. Continued silence could have severe consequences, particularly for Indian businesses. Gulam Rabbani, Bajpatti, Sitamarhi, Bihar While India and the U.S. share a strategic partnership built on mutual respect and shared values, this sort of punitive trade action risks prioritising business interests over the spirit of friendship. The U.S. should choose dialogue that honours both economic realities and the deepening bond between the two nations. Anush D'Cunha S.J., Thiruvananthapuram Nature's warning The 'cloudburst' that wreaked havoc in Uttarkashi's Dharali and Sukhi Top areas is a reminder of the Himalayan region's vulnerability to extreme weather events. The message is clear. The region desperately needs transformation, from reactive responses to proactive resilience building. Only through such an approach can we protect the Himalayan communities while also preserving this ecosystem for future generations. R. Sivakumar, Chennai Deletions, gender disparity How can the Election Commission of India (ECI) ensure free and fair elections in Bihar when there are major issues with deletions and omissions in the electoral rolls?The ECI finds itself in a catch-22 situation. Its actions, once unquestionable, are being questioned by the Opposition and the judiciary. It will be a disaster if the ECI's responses to the Supreme Court's candid observations are not met with concrete replies, evidence and action (Data point, August 7). Balasubramaniam Pavani, Secunderabad On the tomato I write this letter as former Director, Regional Institute of Ophthalmology and Government Ophthalmic Hospital, Chennai. The article, 'The virtues of tomato, a healthy vegetable' ('Science' page, July 27), was descriptive in terms of the health benefits of consuming tomatoes. But as a health-care provider, it is my duty to issue caution against some negative factors in this angel vegetable. Consumption in excess can lead to side-effects in certain individuals. These include acid reflux, allergies, digestive issues and potential kidney problems due to high potassium content. Being rich in calcium and oxalates, the tomato can induce kidney stone formation. The tomato is a nutritious gift from mother nature, but moderation is the key for good health. Dr. M.V.S. Prakash, Chennai
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Business Standard
2 hours ago
- Business Standard
RBI to conduct two VRRR auctions to absorb ₹3 trillion from system
The Reserve Bank of India (RBI) plans to conduct two Variable Rate Reverse Repo (VRRR) auctions on Friday—of six-day and three-day tenures—to withdraw a total of Rs 3 trillion from the banking system. Market participants said the central bank aims to absorb the maturing amount of over Rs 2.8 trillion, while system liquidity remains in surplus at around Rs 4 trillion. 'They are trying to absorb the maturing amount,' said Gaura Sen Gupta, chief economist, IDFC FIRST Bank. 'We have around Rs 4 trillion of surplus liquidity and around Rs 1.6 trillion in the Standing Deposit Facility (SDF), and the tax payments are scheduled around 20 August, hence they want to absorb the excess funds over six and three days,' she added. The RBI's VRRR operations are aimed at absorbing surplus liquidity from the system and anchoring short-term rates closer to the policy repo rate.
