Cautious RBI leaves rates untouched

September 17, 2012

RBI



Mumbai, September 17: Taking a cautious stance, the Reserve Bank today cut CRR by 0.25 per cent - the percentage of deposits banks keep with central bank - but refrained from reducing lending rates in view high inflation.

The RBI decision, which comes days after a slew of measures taken by the government to push growth, will release Rs 17,000 crore of primary liquidity into the system.

The liquidity infusion, RBI said, would ensure adequate flow of credit to productive sectors of the economy.

Following the cut, CRR will come down to 4.5 per cent while the repo rate, at which the central bank lends to the banks, would remain unchanged at 8 per cent.

The reverse repo, at which it absorbs excess liquidity through borrowings from banks, remains at 7 per cent.

"As inflationary tendencies have persisted, the primary focus of monetary policy remains the containment of inflation and anchoring of inflation expectations," RBI Governor D Subbarao said while announcing the mid-quarter review of the monetary policy.

The wholesale price-based inflation for August moved up to 7.55 per cent from 6.87 per cent in the previous month.

The RBI said the CRR cut would be effective from September 22.

The moderation in CRR rate is likely to goad banks to bring down their lending rates, which will improve investments and help growth.

Commenting on RBI's action, State Bank of India (SBI) Chairman Pratip Chaudhuri said the bank will review its rates in the light of policy action. The asset liability committee of the bank is expected to meet soon to take a view on rate revision.

"It is a very positive move, as a mid-term policy it is very significant. I think the RBI has given a clear signal that they are willing to respond and that they have taken note of the signs of deceleration in economy," Chaudhuri said.

Noting that growth continues to be weak amidst a negative investment climate, the RBI policy review said that the recent reform measures undertaken by the Government have started to reverse sentiments.

Among other decisions, Government hiked the regulated diesel prices by over Rs 5 per litre, which satisfies the RBI's long standing demand for containing fiscal deficit while also liberalising foreign holding norms in a string of sectors.

RBI said the measures on diesel prices and LPG usage will hurt inflation in the short term, but the steps are a "significant achievement" as they will strengthen macroeconomic fundamentals.

It also noted, with concern, that the rationalisation of cooking gas prices will not have much impact on subsidies as the pass-through to administered prices remains incomplete.

In spite of the recent fiscal measures, RBI blamed the high fiscal and current deficits as the factors preventing it from cutting rates.

However, sounding less hawkish, it said, "The stance of monetary policy will be conditioned by careful and continuous monitoring of the evolving growth-inflation dynamic, management of liquidity conditions to ensure adequate flow of credit to productive sectors and appropriate responses to the shocks emerging from external developments."

For the moment inflationary pressures both at wholesale and retails levels are still strong, it said.

"Containing inflationary pressures and lowering inflation expectations warrant maintaining the momentum of recent policy actions to step up investment, alleviate supply constraints, and improve productivity," RBI said.

RBI also expressed concern over the recent easing of liquidity globally, saying it will lead to commodity prices spiking up which in turn will be detrimental for inflation management.


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June 8,2024

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New Delhi: The Congress Working Committee passed the resolution that party MP Rahul Gandhi should be appointed as the Leader of the Opposition in Lok Sabha, sources said today.

Rahul Gandhi won the Lok Sabha elections from Raebareli in Uttar Pradesh and Wayanad in Kerala.

"All members have given their proposal to the party president. Rahul ji has requested some time to think. However, we want him to stand as strong Leader of Opposition," said All India Mahila Congress president Alka Lamba.

After the CWC meeting, Congress MP Kumari Selja said, "It was the CWC's wish that Rahul Gandhi be elected the LoP..."

Senior Congress leader and newly elected MP from Alappuzha KC Venugopal said "CWC unanimously requested Rahul Gandhi ji to take the responsibility of the leader of the opposition in the Lok Sabha."

The CWC resolution praised Rahul Gandhi for his efforts in the election campaign.

"Former Congress President Rahul Gandhi has to be singled out largely because of the Bharat Jodo Yatra and the Bharat Jodo Nyay Yatra that he designed and led. Both these Yatras that reflected his thinking and personality were historic turning points in our nation's politics and instilled hope and confidence in lakhs of our workers and crores of our voters. Rahul Gandhi's election campaign was single-minded, sharp and pointed and more than any other individual it was he who made the protection of our republic's Constitution the central issue in the 2024 elections. The PaanchNyay-Pachees Guarantee programme which resonated so very powerfully in the election campaign was the outcome of Rahulji's yatras in which he listened to the fears, concerns and aspirations of all people, especially youth, women, farmers, workers, Dalits, Adivasis, OBCs and minorities," it said.

The meeting of the extended Congress Working Committee was held in the national capital on Saturday. The meeting was attended by Congress Parliamentary Party chairperson Sonia Gandhi, Congress chief Mallikarjun Kharge, Congress leaders Rahul Gandhi, Priyanka Gandhi, Manish Tiwari, DK Shivakumar, and Revanth Reddy among others.

Speaking after the CWC meeting, Congress Rajya Sabha MP Pramod Tiwari said, "Definitely he (Rahul Gandhi) should become (LoP in Lok Sabha). This was the request of our working committee. He is fearless and courageous."

Earlier in the day, several party leaders voiced their demand that Rahul Gandhi should take over the key role.

Speaking on the same, Telangana Chief Minister Revanth Reddy said that this is the demand of 140 crore Indians.

"Our demand is the same as that of 140 crore Indians. Rahul Gandhi has to take the position as the leader of the Opposition. Rahul Gandhi has been fighting for women and the unemployed," he said.

Congress MP Sukhjinder Singh Randhawa who won the Lok Sabha election from Gurdaspur said that Rahul Gandhi is someone who can reply to the Prime Minister in the Parliament and hence he should assume the position of LoP.

"We will play the role of a strong Opposition in the Parliament. Yes, we want the country to get such a face who can reply to the Prime Minister. I think the entire country wants this," he said.

After the Lok Sabha Polls, the Congress has emerged as the second-largest party in the election and improved its tally to 100, from 52 in the 2019 Lok Sabha poll.

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News Network
June 4,2024

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New Delhi: From 'pappu' to 'shehzade', Congress leader Rahul Gandhi has been the prime target of BJP's ridicule for years. Jabs at the Gandhi family have been the BJP leader's main line of attack at the main Opposition Congress in every election over the past decade. But as Congress inches towards a 100-seat tally in this Lok Sabha election -- its best show in a decade -- and the INDIA bloc's tally defies all exit polls, the Gandhi siblings have played a central role.

Mr Gandhi virtually launched his campaign with a Bharat Jodo Yatra across the length and breadth of the country. While the actual impact of the yatra in terms of Lok Sabha seats won is a subject of data and debate, there is no doubt that his public interactions on the trail brought him out of television screens to the people and contributed to shattering the perception the BJP had created of him.

Visuals of Mr Gandhi petting puppies, hugging people and chatting with people from every section of the society, from students to truck drivers to mechanics, showed a side of him the country had not seen before.

As for Priyanka Gandhi, many had expected her to contest the polls this time, and questions were raised when she did not. In her response, Ms Gandhi Vadra has said in several interviews that it was a conscious decision. If both she and Rahul contested the election, they would get tied up with campaigning in one constituency, she had said, adding that the plan was to keep her free for rallies. The move clearly seems to have paid off.

As Mr Gandhi travelled across the country to address rallies of the INDIA bloc, Ms Gandhi Vadra also took up the task of leading the Congress's campaign in family strongholds Amethi and Raebareli. Nine hours into the counting, the party seems set for a win in both seats, including Amethi, where Gandhi family loyalist Kishori Lal Sharma has emerged a giant slayer by defeating Union Minister Smriti Irani -- a sweet revenge for Rahul Gandhi's 2019 defeat.

In these seats, Ms Gandhi Vadra was as much the party's face as its brain. From addressing nukkad sabhas to planning the party's moves, she led the campaign in these prestige battles from scratch.

The 2024 election also saw her emergence as an orator who charms the audience and also connects with them. Her counterstrike to Prime Minister Narendra Modi's charge that the Congress plans to bring a wealth distribution plan and would take away "mangalsutra" had made national headlines.

"He says the Congress wants to take away your gold, your mangalsutra. The country has been independent for 70 years. The Congress ruled for 55 years. Has anyone robbed you of your gold or your mangalsutra? When the war was on, Indira Gandhi gave her gold to the country. My mother's mangalsutra was sacrificed for this country," she had said.

According to a PTI report, the Congress leader was attending a party meeting in Amethi when she told the audience that there was a woman among them who wanted to educate her daughter, but her father-in-law was against it. So, the woman stitched sari falls to save money and ensured that her daughter became a graduate. She then invited the woman to stage as the audience cheered.

Such interactions smashed the image the BJP had created for the Gandhi siblings and the ruling party's "royal family" jabs lost their sheen.

Also significant is the fact that the Congress this time contested just 328 seats out of 543 -- its lowest ever, leaving the remaining 215 seats for INDIA allies. Known to bargain hard for seats and then failing to convert them into wins, this was a big climbdown by the Mallikarjun Kharge-led party. And the move seems to have paid off.

The Congress may still finish with half the seats as compared to the BJP, but the Gandhi siblings shine in its stellar show. And at the Congress press meet this evening, Mr Gandhi underlined sister Priyanka's contribution in the party's performance.

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June 4,2024

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New Delhi: The BJP-led NDA was ahead with leads in 296 seats and the opposition I.N.D.I.A. bloc not far behind in 227 seats as votes were counted for the Lok Sabha elections on Tuesday, setting the course for a third consecutive term as prime minister for Narendra Modi but with a stronger opposition.

While the BJP was ahead in 236 of 542 seats, the Congress had leads in 97, signaling a dip for the ruling party from the 303 score in 2019 and a spike for the opposition party’s 52 from the last election. An election marked by acridity and acrimony could end with the treasury benches in reduced numbers and an opposition with more teeth.

In trends available till 11:45 am, the NDA was close to the 300 mark, comfortably over the magic figure of 272 with the opposition I.N.D.I.A. bloc making significant gains.

The country’s most politically significant state Uttar Pradesh, which sends 80 MPs to the Lok Sabha, and the BJP’s bastion of power was poised to be the game changer, bringing the ruling NDA down from the promise of ‘400 par’ with which Election 2024 had started.

While the BJP was ahead in 36 seats, down from 62 the last time, the Samajwadi Party was tantalisingly close at 33, a far cry from the five in 2019. The Congress, which had bagged just one seat in the last election, could win eight seats this time, according to trends available on the Election Commission website.

Prime Minister Narendra Modi, who is set to equal Jawaharlal Nehru’s record of being prime minister for a third term, was trailing behind his Congress rival Ajay Rai in Varanasi in the initial rounds but gained soon after.

His party colleague Smriti Irani was trailing behind Congress candidate and the relatively unknown Gandhi family aide Kishori Lal Sharma in Amethi by more than 39,000 votes. Among those leading from the state, where Yogi Adityanath had steered the Hindutva ship for his party, were Rahul Gandhi from Rae Bareli, Rajnath Singh from Lucknow and Akhilesh Yadav from Kannauj.

As SP chief Akhilesh Yadav kept the I.N.D.I.A. bloc morale high in Uttar Pradesh, the Trinamool Congress, another key ally of the opposition alliance, was leading in 29 seats in West Bengal, a tad higher than its 22 in 2019. The BJP, which had 18 seats in the last Lok Sabha election, was ahead in 10 seats.

In neighbouring Bihar, the BJP was ahead in 11 and its partner JD-U in 14, a vote of confidence for its leader Nitish Kumar who swung from INDIA back to the NDA ahead of the elections. The RJD was poised to win five seats.

Maharashtra, with 48 Lok Sabha seats, saw the Shiv Sena split down the middle since the last election. The BJP, which won 23 seats five years ago, was down with leads in 11 seats, while its ally Shiv Sena could get six. On the other end of the spectrum, the Congress was ahead in 11 seats, up from one, and the Shiv Sena (UBT) in 11.

In Andhra Pradesh, the Chandrababu Naidu-led TDP was ahead in 16 seats of 25, the BJP in three and the YSRCP in four.

Trends for Karnataka showed potential gains for the Congress, with leads in seven seats, up from one last time. The BJP, which got 25 seats in 2019, was ahead in 19.

Deeper south in Kerala, the BJP could make its much-debated electoral entry with trends showing it could bag two seats. In parallel, the Congress, which got 15 seats last time, was ahead in 13, including in Wayanad from where Rahul Gandhi was contesting. The CPI-M had gains in one.

Tamil Nadu seemed to be scripting another story, not ceding any space to the saffron party. The ruling DMK was ahead in 20 and the Congress in eight, exactly where they were in 2019.

Assembly elections also wrote their own narrative.

In Odisha, Naveen Patnaik-led BJD was headed for an unexpected defeat, stymieing Patnaik’s bid for a record sixth term as chief minister. The BJP established early leads in at least 50 assembly seats in Odisha. The BJD nominees, on the other hand, were leading in 35 constituencies in 94 of 147 assembly seats in the state for which trends were available.

In Andhra Pradesh, Chandrababu Naidu’s Telugu Desam Party raced towards power with leads in 125 seats in the house of 175, poised to dislodge Y S Jagan Reddy’s YSRCP, which was ahead only in 21 seats.

As the results came in, showing reverses for the BJP and a score far less than it had predicted, BJP MP Tejasvi Surya said, “It is a historic day for the country in many respects. Perhaps there is no parallel in the world in any democratic country where a democratically elected leader of the nation has been consecutively elected for the third time and with an equal or bigger manner than the preceding two times.”

Congress leader Salman Khurshid added, 'I am not saying we have won, I am not saying they have lost. But this is a clear message about facts on the ground.'

According to Shiv Sena (UBT) MP Sanjay Raut, the I.N.D.I.A. alliance had surpassed the numbers predicted by the exit polls and claimed the opposition bloc will win 295 Lok Sabha seats.

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