2 die in Guwahati as police open fire on citizenship bill protestors

New Delhi, Jul 16: With India's economic growth sputtering, the Reserve Bank of India was expected to maintain a rate-cutting cycle, but an uptick in near-term inflation could give the central bank's Monetary Policy Committee reason to pause for now.

Having cut its key lending rate by an aggressive 115 basis points (bps) in 2020, on top of 135 bps cuts in 2019, the RBI so far has had little success in spurring credit growth amid varying degrees of lockdowns across India.

Some economists and market insiders argue it may be prudent for the MPC, the policy committee, to hold its fire when it meets early next month.

"It's probably too early to administer a demand stimulus. The RBI still has room to cut rates, but we probably want to be more cautious of the timing," said Venkat Pasupuleti, portfolio manager at Dalton Investments.

"Maybe they should wait a quarter to see how things pan out once the lockdown situation is eased further."

Market participants have factored in at least a 25 bps rate cut by the MPC on August 6 while analysts are predicting a total 50-75 bps cuts over the rest of the fiscal year that runs to March 31.

The spike in the retail inflation rate above the RBI's mandated 2%-4% target range is another reason for the central bank to take a breather, analysts say.

Annual retail inflation rose to 6.09% in June, compared to 5.84% in March and sharply above a 5.30% median forecast in a Reuters poll of economists.

Rahul Bajoria, an economist at Barclays, said the spike in both consumer and wholesale prices "could lead to a tempering in enthusiasm for material front-loaded policy support from here on."

Almost all economists however agreed the RBI cannot move away from its accommodative stance or call an end to the rate cutting cycle just yet.

India's economy grew at 3.1% in the March quarter - an eight year low - and some economists have predicted a contraction of more than 20% in the June quarter and a contraction of up to 5% in the fiscal year.

"Even in the event of a pause, we think the RBI and MPC would want to hold out the promise of more cuts," said A. Prasanna, economist with ICICI Securities.

RBI Governor Shaktikanta Das said in a recent speech the need of the hour is to restore confidence, preserve financial stability, revive growth and recover stronger, suggesting inflation concerns are unlikely to deter the downward trajectory for rates too soon.

"The August policy decision would boil down to a judgment call over whether RBI can maintain easy monetary and financial conditions without the aid of a token rate cut," Prasanna said. 

Kochi, Mar 30: Kerala High Court on Monday granted interim bail to the under-trial prisoners and remanded accused in the state till April 30 in view of the lockdown imposed to prevent the spread of coronavirus.

The court said that the accused should report to the local police station immediately after getting bail. Those released on bail must strictly follow the lockdown instructions, the High Court said.

"Those who have been convicted of imprisonment for less than seven years will get bail. Prison Superintendents will release the prisoners who are eligible. But regular offenders are not entitled to get bail," the court said.

After the bail period, the accused should appear in the respective trial courts, where a decision will be taken on their bail by the respective trial courts.

The Supreme Court had last week asked all state governments to release undertrial prisoners, who are facing charges attracting less than seven years imprisonment, to reduce overcrowding of jails amid the ongoing coronavirus scare.

So far, 194 confirmed cases of coronavirus have been reported in the state.

The country is under a 21-day lockdown to prevent the spread of coronavirus, which according to the Ministry of Health and Family Welfare has claimed the lives of 29 people and infected a total of 1071 people as on Monday morning.

May 9: Union Home Minister Amit Shah has said the West Bengal government is not allowing trains with migrant workers to reach the state that may further create hardship for the labourers.

In a letter to West Bengal Chief Minister Mamata Banerjee, Shah said not allowing trains to reach West Bengal is "injustice" to the migrant workers from the state.

Referring to the 'Shramik Special' trains being run by the central government to facilitate transport of migrant workers from different parts of the country to various destinations, the home minister said in the letter that the Centre has facilitated more than two lakh migrants workers to reach home.

Shah said migrant workers from West Bengal are also eager to reach home and the central government is also facilitating the train services.

"But we are not getting expected support from the West Bengal. The state government of West Bengal is not allowing the trains reaching to West Bengal. This is injustice with West Bengal migrant labourers. This will create further hardship for them," Shah wrote.