oppn parties MPC Keeps Rates Unchanged, Raises Growth Forecast To 7% For FY24

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  • Neha Bora was subsequently released and Dipke is to appear before a magistrate today at noon
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  • The Reserve Bank of India is considering further monetary tightening to counter capital outflows and increase the cost of betting against the rupee, according to bankers and analysts cited by Reuters. The measures follow recent rate increases and steps to drain liquidity as pressure on the currency and inflation concerns persist
  • India directed oil marketing companies to stop diverting sugar-based feedstocks for ethanol production in the 2026–27 supply year, according to a new tender issued on Friday. The companies have invited bids for 11 billion litres of ethanol made from alternatives including corn and broken rice, amid concerns about domestic sugar supplies and prices
  • Finance Minister Nirmala Sitharaman said India's trade imbalance with China was growing sharply and attributed the problem partly to restrictions on Indian goods and services entering the Chinese market. China subsequently said it was ready to work with India to address mutual economic and trade concerns; India's trade deficit with China reached $69 billion in the first half of FY2026–27, up 27% year-on-year
  • Indian equity benchmarks extended their recovery on Friday, with the Sensex rising 413.66 points to close at 74,729.27 and the Nifty 50 gaining 148.80 points to settle at 23,146.15. Information technology shares, including Tech Mahindra, Infosys and TCS, helped lift the indices
  • India defeated Zimbabwe by four wickets in the opening women's T20 International in Raipur, taking a 1–0 lead in the three-match series. Deepti Sharma and Niki Prasad combined in an 82-run stand after India's top order collapsed, helping the hosts chase down Zimbabwe's total of 114 for five
  • Indian wrestler Komal won bronze in the women's 59 kg category at the Under-23 World Wrestling Championships in Las Vegas, defeating Kazakhstan's Viktoriia Khusainova 7–2. Fellow Indian Amruta Pujari advanced to the women's 72 kg final after recording two pinfall victories
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  • The Supreme Court of India upheld the Bombay High Court's decision quashing the 2020 write-off of ₹8,415 crore in additional tier-1 bonds issued by Yes Bank (Yes Bank). The court ruled that the bank's administrator lacked the authority to extinguish the bonds under the final reconstruction scheme, strengthening bondholders' claims
  • The Supreme Court issued notices to the Election Commission of India, Delhi Police and opposition leaders, including Rahul Gandhi and Akhilesh Yadav, in separate petitions concerning electoral-roll revision and protests held in Delhi on October 10–12. The court also directed the preservation of CCTV footage linked to allegations of police excesses
  • The Supreme Court ruled that a person converting from Hinduism to Islam cannot automatically claim backward-class reservation benefits in the new religious community solely on the basis of their previous caste status. The judgment upheld the Madras High Court's decision striking down a 2024 Tamil Nadu government order that permitted such certification for specified communities
  • The Election Commission of India ordered a Special Summary Revision of electoral rolls in 14 states and three Union Territories, using January 1, 2027, as the qualifying date for voter eligibility. The draft rolls are scheduled for publication on November 12, claims and objections will be accepted until December 11, and the final rolls are due on January 4, 2027
Delhi HC refuses to ban CJP's Tiranga rally at Central Park in Connaught Place today /////// Police says will control and regulate it /////// NDMC closes the park for the public on Friday and Saturday
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MPC Keeps Rates Unchanged, Raises Growth Forecast To 7% For FY24

By Linus Garg
First publised on 2023-12-09 13:13:12

About the Author

Sunil Garodia Linus tackles things head-on. He takes sides in his analysis and it fits excellently with our editorial policy. No 'maybe's' and 'allegedly' for him, only things in black and white.

After two days of deliberations, the Monetary Policy Committee (MPC) of the RBI unanimously decided to maintain status quo on key policy rates in its December meeting. This was the fifth bimonthly meeting of the MPC in which rates were kept unchanged. Also, by a 5-1 decision, the MPC decided to maintain the stance of 'withdrawal of accommodation'.

RBI governor Shaktikanta Das said that though there has been steady decline in inflation, the policy has to be "actively disinflationary" to bring it as close to the lower threshold (4%) of the RBI tolerance band. He added that the MPC was ready to take appropriate policy actions if the situation warranted since high frequency indicators were pointing towards an increase in price of vegetables and other staples that might push up inflation. As per the bank's projection, inflation will come down marginally to 5.2% in the fourth quarter from 5.6% in this quarter. The bank was however upbeat that it will slide to 4.3% in second and third quarters of FY25.

The RBI was particularly optimistic on the growth front and revised the full year growth estimate for FY24 to 7% from 6.5% earlier. But even after this upward revision, it is clear that growth has fallen considerably in the second half from the high of 7.7% in the first half of FY24. It said that the economy has shown remarkable resilience in the face of slowdown in other major economies. It also said that the urban demand remained steady and it hoped that rural demand will bounce back soon. The RBI was also optimistic about the growth in FY25 and pegged it at 6.7% in the first quarter and expected it to fall marginally thereafter.

It is expected that if the bank's projections about inflation and growth remain on track, the MPC might think of easing policy rates. But that is in future, for with several factors - like uncertainty over the rabi crop, demand and supply equation in cereals, pulses and sugar - weighing in, there is uncertainty in near-term inflation outlook. The government has taken some supply-side actions, like banning production of ethanol from sugarcane juice to shore up sugar production and banning onion exports to contain domestic prices. But how far they will help in increasing supply and checking prices remains to be seen.

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