Inflation expectations are rising, and investment is sliding. That’s the challenge the budget must address
Rajan listed four conditions for free enterprise to be politically viable: Level playing field with easy entry and exit, protection of property rights, broadening access to capabilities and a basic safety net.
Governor Raghuram Rajan does well to clarify that rate cuts will come if government first brings structural reform
Policy broadly in line with market expectation, says FinMin; Investors remain jittery with BSE Sensex falling by 286 points to 24,539.
Overnight call money rates are hovering above the policy rate, while three-month commercial paper rates are now nearly 100 bps above the December 2015 average.
New estimates demand a more nuanced understanding of economic activity
Rajan said that macroeconomic stability during the global turmoil cannot be risked and the government and RBI should continue to bring down inflation.
Indian policymakers obsessively focus on crises in the West, and underestimate the problems emanating from emerging economies
Delivering the C D Deshmukh memorial lecture in the capital, he said that a pensioner would be able to buy more number of dosas from lower interest income provided the inflation remained under control.
Government has to take a political call on aligning small savings rates with market levels
The RBI has already fixed a deadline of March 2017 to clean up the balance sheets of banks. March 2017 deadline for banks to clean up balance sheets.
Raghuram Rajan rightly cautions India against being seen as a weak state that lets off the well-connected loan defaulters.
Rajan also raised the issue whether the RBI is taking a lenient view against malpractices in the banking sector and said there’s “a sense that we do not enforce compliance”.
Raghuram Rajan’s cautionary tale on debt should put the focus on bond markets and governance standards
Will carry out more open bond purchases when more liquidity is needed, said Rajan.