Amid RBI rate cut cheers, did you miss RBI's warning that threatens India’s economy?
Reserve Bank of India (RBI) has cut interest rates. In a move aimed at supporting economic growth, the six-member Monetary Policy Committee (MPC), led by newly appointed Governor Sanjay Malhotra, lowered the repo rate by 25 basis points to 6.25%. But alongside the cautious optimism, Governor Sanjay Malhotra delivered a stark warning: India is not immune to the global storms brewing on the horizon.
Budget with ET
Tax calculator
Also Read: Governor Sanjay Malhotra administers a growth pill with 25 bps rate cut
The decision comes against a backdrop of moderating inflation and slower-than-expected economic growth. While inflation has eased, helped by stable food prices and the impact of past monetary policy actions, growth remains fragile. The RBI expects economic activity to pick up in the coming quarters, but GDP expansion is still significantly lower than last year’s pace.
A strong rabi harvest and a revival in industrial activity are expected to provide much-needed support to growth. On the demand side, household consumption is likely to stay resilient, helped by tax relief measures in the Union Budget.
Business confidence is holding up, with higher capacity utilisation, stronger corporate balance sheets, and steady credit flows pointing towards a rebound in fixed investment. The government’s continued focus on capital expenditure is another key pillar of support, reflected in positive signals from enterprise surveys and purchasing managers’ indices (PMIs).
Artificial Intelligence(AI)
Java Programming with
