Last week, while rolling back most of the fare hike proposals of his predecessor Dinesh Trivedi, railway minister Mukul Roy said he had to revise the proposals as “the concern for the poor man is overriding”; and by doing so, he was “biting another bullet, though of a different kind”. Prime Minister Manmohan Singh had stressed the need on “biting the bullet” on subsidies after Pranab Mukherjee presented the national budget. Mukherjee, too, in his interviews with television channels ever since he presented the budget has been talking about “biting the bullet” to bring down the fiscal deficit.
Mumbai: After a three-year stint as India CEO of The Hongkong and Shanghai Banking Corp. Ltd, Stuart Davis is heading to Hong Kong, the bank’s Asia headquarters, in April. Stuart spoke in an interview about the turnaround of retail business, the bank’s likely acquisition of retail assets of Royal Bank of Scotland Plc (RBS) in the second half of the year, tight liquidity and a reversal in the interest-rate cycle.
The government will borrow Rs 5.7 trillion from market in fiscal 2013 to bridge an estimated 5.1% fiscal deficit.
The budget is not disappointing—it’s not that it delivered; it’s because of the fact that expectations from Pranab Mukherjee were very low. His initial comments such as “there should be no room for complacency”, “it is necessary to take hard decisions”, and “we have to accelerate the pace of reforms” raised high hopes, but by the time the finance minister finished his one-and-a-half-hour presentation, all hopes were dashed. Jayachandran/Mint There is no attempt to push reforms or paint the big picture.
The 75 basis points (bps) cut in banks’ cash reserve ratio (CRR) last Friday is the second policy action outside a scheduled meeting of Indian central bank ever since D. Subbarao took over as governor in 2008 amid the global credit crunch. The first one was in July 2010 when he raised the policy rate by 25 bps.
There is no surprise in Reserve Bank of India’s decision to cut banks’ cash reserve ratio (CRR) or the portion of deposits that commercial banks need to keep with the central bank a week ahead of its semi-quarterly review of monetary policy, slated for 15 March. A 75 basis points (BPs) CRR cut will infuse Rs48,000 crore liquidity in the system and bring down the CRR level to 4.75 bps, just about 25 bps above the lowest CRR ever prescribed by RBI.
The cash deficit in the Indian banking system rose to a record high of Rs 1.92 trillion last Thursday. This will rise further in the next fortnight after Indian firms pay advance tax on estimated profits for the quarter ending March.