RBI keeps rate unchanged at 6.25 pc; surprises mkts

December 7, 2016

Mumbai, Dec 7: Taking markets by surprise, RBI Governor Urjit Patel today kept short term lending rate unchanged even as the central bank lowered GDP growth rate to 7.1 per cent and short term disruption in economic activities due to demonetisation.

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Patel-led 6-member Monetary Policy Committee, which had in its first policy review cut interest rate by 0.25 per cent in October, belied expectations to keep benchmark repo rate unchanged at 6.25 per cent unanimously.

In view of disruption in economic activities due to demonetisation, RBI lowered growth forecast from 7.6 per cent to 7.1 per cent for the current fiscal.

The headline inflation is projected at 5 per cent by the fourth quarter of 2016-17 with risks tilted to the upside but lower than in the October policy review.

The fuller effects of the house rent allowances under the Seventh Pay Commission award are yet to be assessed, pending implementation, and have not been reckoned in this baseline inflation path, the fifth bi-monthly monthly monetary policy said.

On demonetisation, it said, the withdrawal of old high value currency notes could transiently interrupt some part of industrial activity in November-December due to delays in payments of wages and purchases of inputs, although a fuller assessment is awaited.

"In the services sector, the outlook is mixed with construction, trade, transport, hotels and communication impacted by temporary old currency notes effects, while public administration, defence and other services would continue to be buoyed by the 7th Central Pay Commission (CPC) award and one rank one pension (OROP)," it added.

The central bank also said that almost Rs 12 lakh crore out of total Rs 14.5 lakh crore in scrapped notes have already been deposited in banks.

RBI has also withdraw 100 per cent incremental Cash Reserve Ratio (CRR) from December 10, a move that would allow banks to retain the deposits coming to them as part of demonetisation.

All the six members of Monetary Policy Committee headed by the RBI Governor voted in favour of the today's decision. In the view of the Committee, this bi-monthly review is set against the backdrop of heightened uncertainty.

"Globally, the imminent tightening of monetary policy in the US is triggering bouts of high volatility in financial markets, with the possibility of large spillovers that could have macroeconomic implications for emerging markets," it said.

While supply disruptions in the backdrop of currency replacement may drag down growth this year in India, it is important to analyse more information and experience before judging their full effects and their persistence, RBI said, adding that short-term developments that influence the outlook disproportionately warrant caution with respect to setting the monetary policy stance.

"On balance, therefore, it is prudent to wait and watch how these factors play out and impinge upon the outlook. Accordingly, the policy repo rate has been kept on hold in this review, while retaining an accommodative policy stance," it said.

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April 5,2024

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New Delhi, Apr 5: In a big relief to about 17 lakh madrassa students in Uttar Pradesh, the Supreme Court today paused an Allahabad High Court order scrapping the UP Board of Madarsa Education Act, 2004. This allows about 16,000 madrasas in the state to continue functioning under the 2004 law.

A bench led by Chief Justice of India DY Chandrachud said that the high court decision was prima facie not correct and issued notices to the UP and central governments, and the Madrassa board.

The high court had last month declared the 2004 law "unconstitutional" for allegedly violating the principle of secularism and directed the government to accommodate the madrasa students in the formal education system.

The Supreme Court put it on hold on Friday, saying that the aims and objectives of the Madrassa Board are regulatory in nature and that the establishment of the board itself will not affect secularism.

"The high court, in striking down the provisions of the Act, directed the relocation of the students. This would affect the 17 lakh students. We are of the view that the direction of relocation of students to other schools was not warranted," said the Chief Justice.

If the purpose of the PIL is to ensure that madrassas provide secular education in core subjects such as mathematics, science, history, and languages, the solution would not be to repeal the provisions of the Madarsa Act 2004, he added.

The central and state governments backed the high court judgment in the Supreme Court, with the centre saying suspected entanglement of religion and other relevant issues must be debated.

Senior advocate Abhishek Manu Singhvi, representing the madrassas, said religious education cannot mean religious instruction and that the high court order will leave 10,000 madrassa teachers and 17 lakh students in lurch. But the state government said it has made arrangements for the teachers and students.

Mr Singhvi argued it is wrong to say madrassa education doesn't have quality, isn't universal in nature, and is not broad-based. Singling out the madrassas for a ban is discriminatory and the Supreme Court had said so in the Aruna Roy vs Union of India, 2002 verdict, he pointed out.

The Chief Justice said that the issues that have been raised merit closer reflection and posted the matter for further hearing in the second week of July.

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April 5,2024

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New Delhi: The Congress has released its manifesto for the 2024 Lok Sabha election, with jobs creation, development of infrastructure, and a national caste census among the major highlights.

The manifesto was released in Delhi by party boss Mallikarjun Kharge, who was flanked by senior leaders Sonia Gandhi and Rahul Gandhi. Former Union Finance Minister P Chidambaram - who led the committee that drafted the document - was also present.

"This manifesto will be 'nyay ka dastavez' (a document for justice) in the political history of the country. From the five pillars of the 'Bharat Jodo Nyaya Yatra' - yuva (youth), kisan (farmers), naari (women), shramik (workers), and hissedari (equity), 25 guarantees will emerge... ," Mr Kharge said.

The overall theme of the manifesto is based on 'work', 'wealth', and 'welfare', the party said.

"'Work' means you must provide jobs. 'Wealth' must be created before it is distributed. 'Welfare' means taking care of the poorer sections," the Congress said.

Silent on CAA

While the manifesto is silent on the controversial Citizenship (Amendment) Act and restoration of Article 370, the party promises immediate restoration of statehood to Jammu and Kashmir.

Caste Census

One of the biggest talking points is the caste census - a political hot topic that has been in the headlines since the Bihar government's statewide survey was released in November.

The 48-page document promises to amend the Constitution to raise the 50 per cent cap on reservations for SCs, STs and OBCs, with Caste Census providing the latest data to go ahead with the affirmative action. Addressing land issues, the party also pledges to establish an authority to monitor the distribution of government land and surplus land under the land ceiling Acts to the poor.

MSP for Farmers

The party has also promised to implement MSP, or minimum support price, for farmer growing cash crops. The MSP issue has been at the heart of protests by farmers since 2020, when lakhs from across the country went on a months-long agitation against the centre's (now-scrapped) three farm laws.

The Congress has said it will give a permanent legal guarantee for MSP - a core demand for protesting farmers - based on the formula recommended by the Swaminathan Commission.

"Congress has been the only party that has lent its ear to the distress of the farmers and farm labourers, and we are determined to do everything possible to alleviate their pain and make agriculture a desirable livelihood," the party said, attacking the BJP's response to the farmers protest as "callous and brutal".

Poverty

The party also vowed to eliminate poverty by improving the fortunes of 23 crore people over the next decade. Mr Chidambaram attacked the BJP as a "government of the rich, by the rich, and for the rich", and said it is "driven by the interests of the top 1 per cent".

"... but we will look at the bottom 50 per cent. The bottom 50 per cent is as important. It has been estimated 23 crore people are still poor in this country. The UPA lifted 24 crore people out of poverty and we promise, if the Congress-led government comes to power in 2024, we will lift 23 crore in 10 years."

As part of this promise - and to empower women - the Congress said it would launch a 'Mahalakshmi' scheme to provide an unconditional cash transfer of Rs 1 lakh per year to the oldest female member of every poor family.  Beneficiaries will be identified as those from the bottom level of the income pyramid.

Inequality of income and opportunity remain India's ugliest truth. It is the moral and political responsibility of any government to ensure that every family is assured of a basic income every month, the party said.

National Security, China

The Congress said it "recognises that national security is not enhanced by chest-thumping or exaggerated claims, but by quiet attention to borders and resolute defence preparedness".

The party said it would work to restore status quo on the country's borders with China and "ensure areas where both armies patrolled in the past are again accessible to our soldiers".

This has been seen as a direct jab at the BJP over the military stand-off with China in parts of eastern Ladakh following violence in June 2020 that, the opposition has repeatedly claimed, led to New Delhi surrendering territory to Beijing.

On diplomatic tension with Maldives, the Congress said it work to "repair relations".

Healthcare

Universal free healthcare, including cost of diagnosis, surgery, and medication, will be made available, the party said. This will come with cashless insurance up to ₹ 25 lakh, like the model implemented in Rajasthan, when the Congress was in power.

"We promise that healthcare will be universal and free in public health centres, such as hospitals, clinics, PHCs, MHCs, and dispensaries, as well as health camps. Free healthcare will include examination, diagnosis, treatment, surgery, medicines, rehabilitation, and palliative care."

The Congress said it would also establish Assisted Living and Care Centres for disabled people and provide representation for them in local bodies.

Other Major Points

In a move likely to resonate strongly among unemployed youth struggling with massive loan debts, the party said it would "as a one-time measure of relief" write off all student educational loans, including unpaid interest. This amount will be calculated as on March 15.

Banks will be compensated by the government, the Congress said.

The party said it would also introduce a law to "recognise civil unions between couples belonging to the LGBTQIA+ community".

The Congress said it would amend laws to "combine the efficiency of EVM and transparency of ballot papers". "Voting will be through the EVM but the voter will be able to hold and deposit the machine-generated voting slip into the voter-verifiable paper audit trail (VVPAT) unit," the party said.

2024 Lok Sabha Election

The election will be spread over seven phases beginning April 19. Votes will be declared June 4.

Prime Minister Narendra Modi and the ruling BJP - which is yet to release its manifesto - are bidding for a third consecutive term.  They face a combined challenge from the opposition, which has united (for the most part) under the INDIA banner led by the Congress. 

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April 7,2024

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Purulia: West Bengal Chief Minister Mamata Banerjee on Sunday alleged the central investigating agencies were asking TMC leaders to either join the BJP or face action.

Addressing an election rally in Purulia district, she alleged agencies such as the ED, CBI, NIA and the I-T Department were working as 'arms' of the BJP.

"Agencies such as the NIA, ED and CBI are being used to harass TMC leaders. They are carrying out raids without prior information, and barging into houses. What the women would do if someone entered their house when everyone was asleep in the dead of night?" she asked.

Banerjee was referring to Saturday's incident in Bhupatinagar where a team of the NIA was attacked by a mob when it went to arrest two accused in a blast case.

"The agencies are asking our leaders and activists to either join the BJP or face action," she alleged.

Asking people not to fall for any provocation, Banerjee alleged the BJP was fanning communal passions during Ram Navami.

The chief minister also accused the BJP-led government at the Centre of depriving West Bengal of funds for MGNREGA and PM-Awas schemes.

She said the state government will provide Rs 1.2 lakh for building houses for the poor.

"The EC will not give permission to us to give the money now. After the elections, we will construct the houses of the poor," she said.

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