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RBI hikes interest rates by 0.25 per cent to bring it to 6.5 per cent; loans and EMIs to get costlier

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The Reserve Bank of India (RBI)

Reserve Bank of India’s (RBI) Monetary Policy Committee (MPC) on Wednesday, August 1, raised the interest rate by 0.25 per cent on inflationary concerns.

In its third bi-monthly policy of the current fiscal, the RBI decided to raise benchmark repo or the short term rate at which it lends to other banks by 25 basis points, or 0.25 per cent, to 6.5 per cent.

The reverse repo rate – rate at which the RBI borrows from commercial banks – under the liquidity adjustment facility (LAF) stands adjusted to 6.25%  and marginal standing facility rate and Bank Rate to 6.75%.

The RBI cited rising crude oil prices, volatility in global financial markets, and uncertainty around the full impact of MSP (minimum support price) on inflation among the key factors for its rate-hike decision.

However, the 6-member MPC headed by RBI Governor Urjit Patel kept its stance at neutral. For July-September, it pegged CPI-based retail inflation at 4.2 per cent which it saw firming up to 4.8 per cent in the second half of the current fiscal, media reports said.

The projected inflation rate is above its targeted comfort level of 4 per cent.

RBI kept the GDP growth forecast for the current fiscal unchanged at 7.4 per cent and saw it at 7.5-7.6 per cent in the second half of the current fiscal.

The hike in June was the first time the benchmark lending rate was raised in over four years. This is now the first time since October 2013 that the central bank has raised the repo rate at two consecutive policy meetings.

For those who have taken loans from banks, the RBI’s latest development has come as a bad news. The hike would make home, car loan EMIs costlier.

Experts were surprised with RBI’s neutral stance, reported NDTV. “The hike was expected, but what is surprising is the stance has remained ‘neutral’. We were expecting that since this is the second consecutive hike in two policies, the stance would be changed to ‘tightening’,” Anagha Deodhar, Economist, ICICI Securities was quoted as saying.

RBI projected inflation at 4.6 per cent in second quarter of fiscal 2019, 4.8 per cent in second half of 2018-19 and 5 per cent in first quarter of 2019-20. In June, RBI had projected consumer inflation at 4.8-4.9 per cent in the first half and 4.7 per cent in the second half of 2018-19.

Annual consumer inflation hit 5 per cent in June, the eighth straight month it topped the RBI’s medium-term 4 percent target.

The next MPC meet which will be during the festive season may not see a rate increase. The next meeting of the MPC is scheduled from October 3 to 5, 2018.

India News

PM Modi takes aim at critics with Dimagi Naxal remark at SRCC centenary address

PM Modi revived his dimagi Naxal remark at SRCC’s centenary celebrations and spoke about India’s development journey.

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PM Modi

Prime Minister Narendra Modi revived his ‘dimagi Naxal’ remark while addressing the centenary celebrations of Shri Ram College of Commerce (SRCC) in Delhi on Saturday, using the term to criticise his opponents.

Speaking to students at the Delhi college, PM Modi described the phrase as a “homeopathic pill” and said it had prompted those he described as “dimagi Naxals” to come forward and reveal their views.

The prime minister also used his address to speak to Gen-Z about India’s development journey and asked students to consider the challenges the country had faced in the past.

PM Modi recalls past crises

During his speech, PM Modi referred to the 2013 Kedarnath disaster and the 2008 global financial crisis while criticising the handling of national emergencies by previous governments.

He said the government at the time of the Kedarnath disaster was shaken and questioned its ability to respond to the crisis.

Referring to the 2008 banking crisis, PM Modi alleged that the government of the time failed to effectively deal with the situation and claimed that India’s banking system was pushed close to collapse.

Prime minister lists challenges faced by his government

PM Modi also highlighted several major global crises that occurred during his government’s tenure.

He mentioned the COVID-19 pandemic, the Russia-Ukraine war, disruptions to global trade and supply chains, and the crisis in West Asia.

The prime minister said there had been concerns that India would struggle during these crises but argued that the country had continued to move forward.

PM Modi’s earlier SRCC visit

PM Modi had earlier visited SRCC in 2013, when he was the chief minister of Gujarat. His speech at the college received significant attention, particularly on social media, ahead of the 2014 Lok Sabha election.

His latest visit came during the college’s centenary celebrations, where his address focused on young people, India’s development ambitions and the challenges faced by the country.

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India News

India Metro Rail Network May Overtake US in 2 Years

India’s metro rail network has reached 1,170 km across 26 cities. Union minister Manohar Lal said the country could overtake the US in network length within two years.

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Manohar Lal Khattar

India is on track to become the country with the second-largest metro rail network in the world after China, with Union Minister Manohar Lal saying the country could overtake the United States within the next two years.

India’s metro rail network has now expanded to 1,170 km across 26 cities. The network is only 216 km shorter than the US metro rail network, which stands at 1,386 km, according to figures cited by the minister.

India’s metro network expands rapidly

Speaking after the inauguration of an extended metro service in Indore, Manohar Lal highlighted the pace at which metro connectivity has grown in India.

He said metro services were operational across just 245 km in five cities when Prime Minister Narendra Modi assumed office in 2014. The network has since expanded to 1,170 km across 26 cities.

The minister said India could overtake the US in terms of metro rail network length in the next two years and become the world’s second-largest country in this segment after China.

China currently has around 8,000 km of metro rail lines, according to the figures cited by the minister.

Indore metro extension inaugurated

The minister made the remarks after inaugurating an extended section of the Indore metro. The project was built at a cost of around Rs 2,850 crore.

The Indore metro was earlier operating commercially on a six-km stretch between Gandhi Nagar and Super Corridor-3 stations. Following the extension, the service will operate on a 17-km route between Gandhi Nagar and Malviya Nagar Chauraha.

Madhya Pradesh Chief Minister Mohan Yadav said the metro service would mark a new phase in Indore’s development. He also said the network would eventually be extended to Ujjain and other nearby areas.

India’s metro rail network: Key figures

  • India currently has 1,170 km of operational metro rail network.
  • Metro services are operational across 26 cities.
  • The US has around 1,386 km of metro rail network.
  • India is currently 216 km behind the US.
  • China has around 8,000 km of metro rail lines.
  • India’s operational network stood at 245 km across five cities in 2014.

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India News

PM Modi returns to SRCC after 13 years, revisits 2013 glass full speech

PM Narendra Modi returned to SRCC after 13 years for its centenary celebrations, revisiting themes from his landmark 2013 address.

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PM Narendra Modi

Prime Minister Narendra Modi returned to Delhi University’s Shri Ram College of Commerce (SRCC) on Saturday, 13 years after his previous visit to the institution as Gujarat chief minister. 

His latest visit came as SRCC marked its centenary celebrations. Modi’s 2013 address at the college had attracted significant attention as he spoke about India’s youth, governance and the country’s demographic potential.

In 2013, Modi was Gujarat chief minister and had not yet been named the BJP’s prime ministerial candidate. He returned to the same campus this year as Prime Minister, having completed 12 years as Prime Minister and serving his third consecutive term. 

What PM Modi said at SRCC in 2013

The 2013 lecture was titled Emerging Business Models in the Global Scenario. The address also covered governance and India’s young population.

He described India’s youth as a source of national strength rather than simply a group of new-age voters. He also highlighted India’s demographic advantage and argued that the country needed to make better use of its young population.

One of the notable moments from the speech involved a glass of water.  Modi contrasted the conventional descriptions of a glass as half full or half empty and said he viewed it as full, with half containing water and the other half air.

The speech also included his remarks on technology and young Indians. Referring to an anecdote from a visit to Taiwan, Modi used the phrase “mouse-charmers” to describe Indians using computers and suggested that young Indians had the ability to influence the world through technology.

‘Minimum government, maximum governance’

Modi’s 2013 address also touched on governance. He spoke about the role of government and the need for better governance.

He also spoke about India’s potential in the 21st century. 

Modi returns as PM for SRCC centenary

The September 5 visit coincided with Teachers’ Day and SRCC’s 100th anniversary. The Prime Minister’s Office had announced that Modi would participate in the college’s centenary celebrations and address the gathering. SRCC was established in 1926 by industrialist and philanthropist Sir Shri Ram.

Earlier this year, Modi also met the SRCC governing body at his residence in April in connection with the college’s centenary celebrations and released a commemorative postage stamp marking the occasion. 

The return to SRCC came 13 years after his 2013 appearance at the college, when he addressed students as Gujarat chief minister.

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