Here's how you can save on interest after RBI's repo rate cut
The
RBI
's recent 0.5%
repo rate
cut to 5.5% brings relief to
home loan
borrowers by lowering monthly EMIs. Most new home loans in India are linked to the repo rate through the Repo Linked Lending Rate (RLLR) system, meaning you'll likely see reduced interest rates soon. For example, a 20-year home loan could see its EMI drop significantly, putting extra cash in your pocket each month. Larger loans will yield even bigger savings (see graphic). Banks like Canara or UCO have already cut rates to 7.75%, but some private banks may take a few months to pass on the full benefit, so check with your lender. With reduced EMIs, you can use the extra money for daily expenses, savings, or paying off your loan faster to save more interest. To make the most of this, confirm the rate cut has been applied to your loan and consider increasing your EMI slightly to shorten the loan term.
Interest savings after RBI repo rate cut
Interest rates fall, EMIs shrink, and long-term savings grow for home loan borrowers.
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Hindustan Times
40 minutes ago
- Hindustan Times
Housing supply in the top 15 Tier-2 cities drops by 35% in Q1 2025, with 90% of the new inventory priced below ₹2 crore
Housing supply in the top 15 Tier-2 cities, including four cities of Gujarat, Ahmedabad, Gandhinagar, Surat, and Vadodara, fell by a whopping 35% to 30,155 units in the January-March period of 2025, with 48% of the supply in the ₹50L-1 crore price range, said a report by NSE-listed real estate data analytics firm PropEquity. The supply stood at 45,901 units, with 36% of the launches in the price range of ₹50L-1crore in Q1 2024. Bhubaneshwar witnessed the highest decline, at 72% to 772 units in Q1 2025, while Nashik saw the least decline, at 2% to 2466 units. In the Ahmedabad real estate market, the supply fell by 35% to 11,096 units from 17,108 units in Q1 2024. In terms of supply going up, Coimbatore is the only city witnessing a 127% increase in housing supply from 477 to 1,077, the report said. Also Read: Housing sales in top 15 Tier 2 cities fall 8%, sales value up 6% in Q1 2025: Report The report further added that Eastern and Central India, with a 68% fall in new launches in Q1 2025, saw the highest decline, followed by 55% in Northern India, 28% in Western India and 26% in Southern India. The seven State Capitals in the top 15 tier 2 cities saw a 43% decline in supply in Q1 2025. Samir Jasuja, Founder and CEO, PropEquity, said, 'The decline in supply is a result of a cautious approach and shifting priorities by developers. Financially robust developers with a strong balance sheet look to launch premium homes in order to increase their profit margin. As a result, the supply of homes under ₹50 lakh has seen a consistent decline due to its unviability. Meanwhile, homes priced between ₹1-2 crore have seen supply share increasing from 18% to 23%.' 'With home loan rates hovering around 8-8.5%, the recent reduction of 50bps in repo rate by the RBI will further drive down the home loan rates, thereby providing an impetus in the ₹50L-2cr priced homes in tier 2 cities," Jasuja said. 'The tier 2 cities present a huge opportunity for corporates and developers as massive infrastructure development and the government's focus on making these cities as growth drivers will enable end-user demand," Jasuja said. Also Read: Mumbai's unsold luxury housing inventory rises 36% in Q1 2025 after two-year decline: ANAROCK Housing units priced under ₹2 crore accounted for 95% of the total supply in Q1 2025, up from 87% in the same period last year. The report said the supply of units priced under ₹50 lakh more than halved to 7,124 units in Q1 2025, as against 15420 units in the same period last year. Its share of the total supply fell from 33% to 24% in Q1 2025. Similarly, the supply of units priced between ₹50 lakh and ₹1 crore dipped by 12%, and its share rose from 36% to 48% in Q1 2025. The supply of units priced between ₹1-2 cr fell by 17% and its share rose from 18% to 23% in Q1 2025. Also Read: Over 29,000 complaints filed by homebuyers against 5,500 real estate projects in Maharashtra: MahaRERA data The supply of units priced ₹2 crore and above dipped by 73% in Q1 2025, and its share dipped from 13% to 5%. State Capitals saw a 90% drop in the supply of units priced under ₹50 lakh and a 13% drop in the supply of units priced between ₹50 lakh and ₹1 crore in Q1 2025. However, the supply of units priced between ₹1-2 crore rose by 31%, the report said.
Indian Express
an hour ago
- Indian Express
Fiscal and investment credibility, not headline numbers, will drive India's economic growth
Written by Deepanshu Mohan & Ankur Singh Two critical trends have occurred with little discussion or critical reflection. One is the recent data showing inward FDI (Foreign Direct Investment) capital flows reducing, as against the rise observed in outward FDI (capital moving out of the country), which indicates weakening investor confidence and/or low growth in capacity utilisation of existing (or already invested) private capital in key sectors. According to the RBI, India performs well in terms of greenfield FDI (new projects) investments announced during 2024–25, following the US, UK, and France, as the fourth destination most preferred by investors. But what's important is to distinguish 'gross flows' of investment from 'net flows'. As reported and explained, 'Gross flows account only for the FDI that flows into the country. It doesn't take into account the funds that flow out due to foreign companies repatriating funds to their head offices overseas, or foreign investors selling off investments in Indian companies, or Indian companies investing in ventures overseas. Net flows, after accounting for the outward movement of funds, collapsed to just around $400 million in 2024–25, down from over $10 billion the year before.' This is worrying and signals a structural shift in India's FDI-led investment ecosystem. Beyond this trend, Moody's cut the United States' sovereign credit rating on May 16 from AAA to Aa1. The downgrade wasn't in reaction to a crash, a pandemic, or a war. This was also not a sudden moment of fiscal slippage. It was something slower and far more dangerous: the normalisation of fiscal recklessness at the heart of the global monetary order. The timing of this also matters. Unlike the S&P downgrade in 2011, which followed the debt-ceiling standoff, or Fitch's move in 2023 amid post-COVID distortions, Moody's decision came in a year of relative economic calm, at least on the surface. Inflation is easing, unemployment is low, and global markets are more stable than they've been in years. That's what makes the downgrade quietly radical. Under Trump's presidency, the US has doubled down on a mix of tax cuts, tariff wars, and populist spending — all without credible offsets. The so-called One Big Beautiful Bill, heavy on headline-friendly promises like tax exemptions on tips and overtime pay, masks an extraordinary fiscal burden. Independent estimates peg its ten-year cost at over $5 trillion. That's on top of a debt-to-GDP ratio already exceeding 120 per cent. That shift matters for every other country trying to navigate a world built on dollar stability. It matters most for emerging markets like India, which borrow trust before they borrow money. If even the US can lose its fiscal halo, no country is immune from scrutiny. In India, elections have long served as budget announcements. Whether in the corridors of the Centre or on the campaign trail in the states, fiscal responsibility is often the first casualty of political ambition. Loan waivers, free electricity, subsidised gas cylinders, unemployment stipends, direct cash transfers — the list of election-time giveaways has grown longer with each cycle. In recent years, nearly every state election — from Haryana to Jharkhand, Delhi to Maharashtra — has witnessed a scramble among parties to outdo each other in promises of material entitlements: free rides, free water, free laptops. India's general government gross debt stands close to 80 per cent of GDP. Its combined fiscal deficit continues to hover above prudential norms. Yet our politicians treat the budget as an open-ended ledger for electoral engineering, diverting scarce public funds toward short-term voter appeasement rather than long-term nation-building. This erosion becomes all the more dangerous in the context of a shifting global climate — one in which financial markets may no longer be willing to turn a blind eye to fiscal indiscipline, however well-wrapped in democratic legitimacy it may be. Moody's downgrade of the United States marks a turning point. When the world's largest economy, issuer of the global reserve currency and anchor of financial markets, sees its sovereign creditworthiness questioned, it signals a recalibration in how markets view risk. This is not a one-off judgement. It is part of a broader repricing of fiscal credibility — one that should worry emerging economies more than most. With the US downgrade, the club of AAA-rated sovereigns has grown even more exclusive. Germany and Canada, which were long considered models of stability, too are now grappling with their own budget imbalances, prompting speculation that they, too, may soon fall off the list. For India, the implications of this are twofold and urgent. First, it is a reminder that the global financial order no longer offers blanket indulgence to profligacy. Its capital markets remain vulnerable to swings in foreign sentiment, and its monetary policy is constrained by external balances. In such a landscape, credibility must be consistently earned. Second, India's vulnerabilities are institutional. Beneath the headline numbers, what is often ignored is inconsistent tax enforcement, erratic regulatory actions, and delays in judicial and insolvency mechanisms. These are not peripheral issues; they shape how investors price long-term risk. On FDI, behind the headline numbers shared earlier — often denominated in billions of dollars — India has been affected as well. As a share of GDP, net FDI into India peaked at 2.65 per cent in 2009. According to a recent study, other preferred destinations for FDI, such as China or Vietnam, have also seen net FDI as a share of GDP fall in recent years. I have argued earlier that India needs productivism — to borrow from Dani Rodrik's reasoning — and must prioritise the dissemination of productive economic opportunities and investment capital across all sectors and segments of the workforce. This will help utilise effective capital mobility for job creation as well. All this requires a critical shift from fiscal management as a crisis-response to fiscal credibility as the default posture. Markets don't send warnings like this twice. Deepanshu Mohan is Professor of Economics and Dean, IDEAS, Office of InterDisciplinary Studies, Director, Centre for New Economics Studies, Jindal School of Liberal Arts and Humanities. Ankur Singh works at CNES
Indian Express
an hour ago
- Indian Express
Fall in food prices pulls down May CPI inflation to 2.82%, lowest since Feb 2019
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Cereals also helped to bring down the overall food inflation in May 2025, with prices down 0.6 per cent compared to the previous month. Prices of vegetables, meanwhile, inched up slightly last month from April 2025. However, in year-on-year (y-o-y) terms, retail prices of vegetables were down 13.7 per cent — the sharpest pace of decline since December 2022, according to Paras Jasrai, associate director and economist at India Ratings & Research. Proteins became more expensive on a sequential basis in May 2025. While the price of meat and fish was up 1.5 per cent m-o-m, egg prices rose 2.5 per cent and milk turned 0.7 per cent more expensive in May. Core inflation — which excludes items whose prices are volatile such as food and fuel and is seen as an indicator of underlying demand conditions — inched up to around 4.2 per cent, according to calculations done by The Indian Express. The steady rise in core inflation over the last year-and-a-half or so is suggestive of 'steady demand conditions' in the economy, said Jasrai of India Ratings. In terms of the regional break-up, urban inflation eased to 3.07 per cent in May 2025 from 3.36 per cent the previous month, while rural CPI inflation declined to 2.59 per cent from 2.92 per cent. Inflation in May 2025 was highest in Kerala at 6.46 per cent, while it was lowest in Telangana, at 0.55 per cent. According to Sujan Hajra, chief economist at Anand Rathi Group, the downward trend in CPI inflation is expected to continue through October 2025, with averaging for FY26 likely to undershoot the RBI's latest forecast of 3.7 per cent. ICRA Chief Economist, Aditi Nayar, expects retail inflation to decline further to around 2.5 per cent in June 2025 and average 3.5 per cent in FY26. 'Looking ahead, on a y-o-y (year-on-year) basis, as many as 17 of the 22 food items for which the daily data is released, recorded a lower y-o-y inflation in June 2025 (until June 10, 2025) vis-à-vis May 2025, barring most edible oils and tea,' Nayar said. 'Moreover, the GoI (Government of India) has reduced the import duty on edible oils effective end-May 2025, which would lead to a softening in prices going forward, thereby auguring well for the oils and fats inflation readings through the fiscal, which would also be suppressed by a high base.' Rajani Sinha, chief economist at CareEdge, said that while the India Meteorological Department's forecast of an above-normal monsoon reinforces the favourable outlook for food inflation, the spatial and temporal distribution of the rains will be critical. 'Despite the early onset, monsoon activity has slowed, although it remains early in the season, with potential for recovery in the coming weeks. Weather-related risks will need close monitoring,' Sinha added. While the RBI's Monetary Policy Committee (MPC) last week cut the policy repo rate by an unexpectedly large 50 basis points (bps) to 5.50 per cent, it also tightened the stance of its policy to 'neutral' from 'accommodative', arguing that 'monetary policy is left with very limited space to support growth'. However, economists see the space for more one rate cut from the MPC, although not at the committee's next meeting in August 2025. Jasrai of India Ratings, for instance, expects a status quo on interest rates in August 2025 considering inflation is heading for the RBI's forecast of 2.9 per cent for April-June 2025 and the monetary easing affected so far. 'We expect, at max one more 25 bps cut this fiscal, unless there are surprises from global development or growth declines sharply,' Jasrai said. On Tuesday, the World Bank lowered its global growth forecast for 2025 to 2.3 per cent from its January 2025 prediction of 2.7 per cent citing 'heightened trade tensions and policy uncertainty'. Growth in 2026 is expected to pick up only slightly to 2.4 per cent and further to 2.6 per cent in 2027. While a global recession is not expected, the World Bank's latest projections for the next two years, should they turn out as forecast, would mean average global growth in the first seven years of the 2020s will be the slowest of any decade since the 1960s, it said. Siddharth Upasani is a Deputy Associate Editor with The Indian Express. He reports primarily on data and the economy, looking for trends and changes in the former which paint a picture of the latter. Before The Indian Express, he worked at Moneycontrol and financial newswire Informist (previously called Cogencis). Outside of work, sports, fantasy football, and graphic novels keep him busy. ... Read More
