Latest news with #PoonamGupta
Time of India
5 hours ago
- Business
- Time of India
RBI's jumbo rate cut aims to spur spending & investment
RBI MUMBAI: RBI aimed to signal businesses that cheap funds will be available with its double-barrel rate cut earlier this month to boost growth through spending and investment. According to minutes of the monetary policy committee's meeting, the interest rate cut was triggered by signs that companies were deferring investment plans despite rising capacity utilisation even as inflation was expected to undershoot. Continued uncertainty had pushed top executives into what central bank officials described as a 'zone of inaction'. The MPC voted for an unexpected 50-basis-point (100bps = 1 percentage point) cut in the repo rate or the rate at which RBI lends to banks. The MPC also voted to change the policy stance to 'neutral' from 'accommodative' which RBI governor Sanjay Malhotra said gave it room to 'cut, pause or hike rate' depending on evolving conditions. . 'It is expected that the front-loaded rate action along with certainty on the liquidity front would send a clear signal to economic agents, thereby supporting consumption and investment through lower cost of borrowing,' the governor said in the minutes of the June 6-9 MPC meeting. The meeting also offered a glimpse into the policy stance of deputy governor Poonam Gupta, who joined the central bank in April. Her comments suggest a dovish leaning within the current policy context. by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like What She Did Mid-Air Left Passengers Speechless medalmerit Learn More Undo Gupta underscored the importance of monetary support for accelerating growth, and said policy must help the economy 'attain and even surpass past rates of growth'. She voted for a 50bps cut, citing the need to 'foster policy certainty and faster transmission'. She also flagged the possibility of inflation falling below target. Internal member Rajiv Ranjan also backed a 50bps cut, saying the decline in inflation was sharper than expected, giving the central bank room to focus on growth. He said larger cuts in an expansionary phase are often needed to have the same impact on output as smaller hikes during contractionary periods. According to him, front-loading sends a stronger signal and speeds up transmission. 'It would be appropriate to provide some certainty on the domestic rate and liquidity front so that agents do not delay and postpone their decisions. Literature suggests that uncertainty plays a role in forming the 'zone of inaction',' Ranjan said. Stay informed with the latest business news, updates on bank holidays and public holidays . AI Masterclass for Students. Upskill Young Ones Today!– Join Now
Time of India
15 hours ago
- Business
- Time of India
Frontloading rate cuts is a clear "signal" to boost growth: MPC
India's monetary policymakers used a benign inflation outlook to frontload rate cuts and send a 'clear signal' to productive sectors to boost growth, showed the Minutes of the June 6 meeting that slashed benchmark rates by an outsized half a percentage point. A bigger reduction would also quicken transmission, argued those in favour. 'Given the sharp reduction in inflation over the past few months and the projected reduction in annual average inflation…, it is expected that the front-loaded rate action along with certainty on the liquidity front would send a clear signal to the economic agents, thereby supporting consumption and investment through lower cost of borrowing,' central bank governor Sanjay Malhotra was cited as saying in the Minutes of the Monetary Policy Committee (MPC) published Friday. On June 6, the Reserve Bank of India (RBI) lowered the benchmark repo rate by an unexpected 50 basis points to 5.5% and changed the policy stance to 'neutral' from 'accommodative', going by the majority vote of the MPC. One basis point is a hundredth of a percentage point. "Overall, while a case can be made for two consecutive rate cuts of 25 bps each in this as well as the next policy cycle, there is also merit in front-loading these cuts. Therefore, I vote for a policy rate cut by 50 bps in this meeting" said Poonam Gupta, deputy governor in her first MPC vote, " This should help in fostering policy certainty and faster transmission than a staggered rate cut, and in more effectively countering the challenges emanating from the global economy". Rajiv Ranjan, an internal member on the rate-setting panel, was of the opinion that since monetary policy worked with a lag, under the current circumstances, a 50-bps cut was preferable to two 25-bps cuts for faster transmission. 'Similar to the frontloaded rate hikes during the tightening cycle, frontloading rate cuts could help in hastening transmission by providing decisive signals and confidence to the stakeholders' Ranjan said. The inflation outlook is 3.7% for FY26, lower than the 4% mandated target. The GDP is forecast at 6.5% for the year. In May, the headline consumer price gauge was 2.82%. 'Liquidity Outweighs Rates' Saugata Bhattacharya, who had split ranks with panel members on the quantum of the reduction, voted for a 25-bps rate cut, arguing that boosting durable liquidity would be more impactful on transmission than a steeper reduction in policy rates. 'The RBI's liquidity infusion and other measures have played a key role in this process, partly via lower money market and short-term interest rates, reducing the overall banks' cost of funds,' Bhattacharya, an external member, was cited as saying. 'The RBI data suggests that Rs 9.5 lakh crores of durable liquidity was injected into the banking system since January. In this context, I believe the RBI's assurance of continuing large durable liquidity support is likely to have a more dominant effect on further transmission compared to a deep cut in the repo rate.' The RBI's cumulative 100 bps cuts since February come amidst private investment, especially in manufacturing, and urban consumption, remaining subdued. Additionally, the uncertain external environment has complicated the economic growth outlook for 2025-26, especially due to political tensions and trade war which has impacted job creation. 'A heavier-than-expected cut in policy rate (along with the possible fiscal policy support) would send a clear message that India is serious about supporting economic growth momentum and would spare no effort in terms of policy interventions' said external member Nagesh Kumar, director and chief executive, Institute for Studies in Industrial Development. 'A double dose of rate cut is likely to bring down lending rates significantly, helping to spur the investment and consumption of durable goods.' Decision Dilemma Expectations of further rate cuts have likely delayed the materialisation of demand and investment decisions. 'In such an environment, given the market expectation of a 50-bps rate cut in this cycle, a staggered rate cut can further delay the materialisation of demand and investment decisions,' said external member Ram Singh, Director, Delhi School of Economics. 'By contrast, a front-loaded 50-bps cut in the policy rate is likely to help achieve the twin objectives of supporting demand and growth by reducing the cost of funds for borrowers'. One of the concerns raised was the interest rate differential between India policy rates and the US Fed rates, which could lead to capital flight and can put pressure on the rupee. 'However, given the robust fundamentals of the Indian economy, including a comfortable current account situation, any pressure on INR is likely to be confined to the short run,' Ram Singh said.
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Business Standard
21-05-2025
- Business
- Business Standard
Outlook for India is one of cautious optimism, says the RBI report
Amid uncertainties in the global economy due to tariff wars and weak consumer sentiments, the Indian economy is exhibiting resilience with various high frequency indicators of industrial and services sectors sustaining their momentum in April, the monthly state of the economy report of the Reserve Bank of India (RBI) said. The optimism on domestic growth, along with the news of a temporary freeze on tariff measures by the US, led to a significant recovery of financial markets by mid-April, the report said. It also observed the domestic equity market, which declined initially in response to the tariff announcements by the US, gained momentum in the second half of April in the wake of robust corporate earnings reports for the Jan-March period by some banking and financial sector companies. 'The global economic outlook remains clouded amidst shifting policy landscapes and lingering vulnerabilities. In the midst of these uncertainties, the outlook for India is one of cautious optimism,' the report, authored by RBI staffers, with the guidance of deputy governor Poonam Gupta, said. It is clarified that views expressed in the report are not of the central bank's. Citing IMF projections of April 2025, the report noted India is projected to remain the fastest growing major economy in 2025 and is likely to surpass Japan this year to become the world's fourth largest economy. It further said that the inflation pressure has eased significantly and is poised for a durable alignment with the target in 2025-26. 'The prospects of bumper rabi harvest and the outlook of an above normal monsoon would further strengthen rural consumption and is also likely to keep food inflation in check. Consumers and businesses remain confident, supportive for a strengthening of economic activity,' it said. The report pointed out that in the midst of global trade realignments and industrial policy shifts, India is increasingly positioned to function as a 'connector country' that can become a key intermediary in sectors such as technology, digital services and pharmaceuticals. 'Going forward, notwithstanding the daunting challenges in the horizon, India stands well-positioned to navigate the ongoing global headwinds with confidence, ready to harness emerging opportunities and consolidate its role as a key driver of global growth,' it said. Highlighting that the benign headline inflation movements were primarily driven by the substantial easing of food prices seen since last winter, the report noted that core inflation (CPI excluding food and fuel inflation) movements continued to be disproportionately impacted by the highly elevated gold prices. 'Excluding its impact, underlying inflation pressures too remained muted,' it said. The report said that inflation pressure has eased significantly and is poised for a durable alignment with the target in 2025-26. 'Consumers and businesses remain confident, supportive for a strengthening of economic activity' it added.
Time of India
21-05-2025
- Business
- Time of India
India likely to drive global growth, benign home inflation strengthens RBI's rate cut hopes
Live Events (You can now subscribe to our (You can now subscribe to our Economic Times WhatsApp channel India is poised to consolidate its role as a key driver of global growth amid disruptions due to global trade realignments, while domestic inflation is set for a durable alignment with the central bank target, the Reserve Bank of India said in its state of economy inflation outlook by central bank researchers reinforces the expectation of at least two more policy rate cuts this year, in addition to the 50 basis points repo rate reduction since February."Inflation pressure has eased significantly and is poised for a durable alignment with the target in 2025-26. The prospects of bumper rabi harvest and the outlook of an above-normal monsoon would further strengthen rural consumption and is also likely to keep food inflation in check," the RBI report inflation for the financial year 2025-26 is projected at 4 per cent, with Q1 at 3.6 per cent, Q2 at 3.9 per cent, Q3 at 3.8 per cent; and Q4 at 4.4 per the prospect of India's economy, RBI researchers said: "Notwithstanding the daunting challenges in the horizon,India stands well-positioned to navigate the ongoing global headwinds with confidence, ready to harness emerging opportunities and consolidate its role as a key driver of global growth."The state of report was penned by the central bank researchers while they acknowledged the comments and guidance given by new deputy governor Poonam Gupta. RBI maintains that the views expressed are that of the to projections by the International Monetary Fund in April, India is projected to remain the fastest growing major economy in 2025 and is likely to surpass Japan this year to become the world's fourth largest economy."In the midst of global trade realignments and industrial policy shifts, India is increasingly positioned to function as a 'connector country' that can become a key intermediary in sectors such as technology, digital services and pharmaceuticals," they authors opined that the Indian economy gets strength from its monetary, financial and political stability as well as policy consistency and congenial business environment. Strong macroeconomic fundamentals along with a transparent, rule-based and forward-looking policy ecosystem ring-fenced the banks' credit growth moderated to 10.9 per cent as on May 2, 2025 against 15.9 per cent a year ago due to weaker momentum and unfavourable base effect.
Time of India
17-05-2025
- Time of India
FIR against 2 Haryana officials for embezzlement of pension funds
1 2 Chandigarh: The UT police booked two Haryana officials for their alleged involvement in the embezzlement of Rs 25 lakh. As per the FIR, the accused embezzled the pension fund of the Haryana govt. Sector 17 police are investigating the matter. The investigation by the pension and IT branches found that the accused, Poonam Gupta, a system analyst, was responsible for maintaining the IT branch's data. Also, she was involved in transferring pension and arrears to beneficiaries' bank accounts under various social security pension schemes run by the Haryana department. On May 13, Parvesh Kumar, a programmer working in the IT branch, informed the authorities that Poonam Gupta allegedly transferred arrears to fake bank accounts. The committee found that these fake accounts, into which Poonam Gupta transferred the arrears, were linked to the IDs of deceased beneficiaries. The initial investigation indicated that Poonam Gupta, in collusion with Joginder Singh, a clerk in the audit branch, allegedly embezzled govt funds amounting to lakhs. It also appeared that this embezzlement was ongoing for a long time, as it was discovered that large sums were transferred to the bank account of Saroj Singh, wife of Joginder Singh, by Poonam Gupta. by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like Scam Exposed: What They Won't Tell You about zero trust! Expertinspector Click Here Undo The committee examined Joginder Singh's bank accounts and found that a joint account with his wife, at SBI, Ambala Cantt, received Rs 18,95,000 via PFMS from Dec 2024 to May 13. Also, Rs 6,30,000 was transferred to Saroj Singh's account in May 2025. It was also noted that Joginder Singh's salary was deposited into his SBI account, which was linked to the embezzled funds. The investigation revealed that Poonam Gupta and Joginder Singh allegedly embezzled approximately Rs 25,25,000 through collusion. The Haryana officials filed a complaint at Sector 17 police station, and police registered a case under the relevant sections of BNS and started a probe. The Haryana govt terminated the services of Poonam Gupta and suspended Joginder Singh. Chandigarh: The UT police booked two Haryana officials for their alleged involvement in the embezzlement of Rs 25 lakh. As per the FIR, the accused embezzled the pension fund of the Haryana govt. Sector 17 police are investigating the matter. The investigation by the pension and IT branches found that the accused, Poonam Gupta, a system analyst, was responsible for maintaining the IT branch's data. Also, she was involved in transferring pension and arrears to beneficiaries' bank accounts under various social security pension schemes run by the Haryana department. On May 13, Parvesh Kumar, a programmer working in the IT branch, informed the authorities that Poonam Gupta allegedly transferred arrears to fake bank accounts. The committee found that these fake accounts, into which Poonam Gupta transferred the arrears, were linked to the IDs of deceased beneficiaries. The initial investigation indicated that Poonam Gupta, in collusion with Joginder Singh, a clerk in the audit branch, allegedly embezzled govt funds amounting to lakhs. It also appeared that this embezzlement was ongoing for a long time, as it was discovered that large sums were transferred to the bank account of Saroj Singh, wife of Joginder Singh, by Poonam Gupta. The committee examined Joginder Singh's bank accounts and found that a joint account with his wife, at SBI, Ambala Cantt, received Rs 18,95,000 via PFMS from Dec 2024 to May 13. Also, Rs 6,30,000 was transferred to Saroj Singh's account in May 2025. It was also noted that Joginder Singh's salary was deposited into his SBI account, which was linked to the embezzled funds. The investigation revealed that Poonam Gupta and Joginder Singh allegedly embezzled approximately Rs 25,25,000 through collusion. The Haryana officials filed a complaint at Sector 17 police station, and police registered a case under the relevant sections of BNS and started a probe. The Haryana govt terminated the services of Poonam Gupta and suspended Joginder Singh.
