Flagging concerns about fiscal and external imbalances in the economy, the apex bank said that more reforms are required, especially in road and power sectors, to remove the investment bottlenecks
Mumbai: The Reserve Bank of India (RBI) on Monday said recent reforms have reduced the immediate risks for the economy but emphasised on the need for more measures to restore investor confidence, reports PTI.
Flagging concerns about fiscal and external imbalances in the economy, the apex bank said that more reforms are required, especially in road and power sectors, to remove the investment bottlenecks.
"The fresh round of reforms that were initiated in September 2012, after a hiatus, has reduced the immediate risks facing the Indian economy...
"On the whole it appears that the reform measures taken so far have not decisively lifted business sentiments and further action may be needed to restore confidence," RBI said in its third quarter review of Macroeconomic and Monetary Development.
The monetary policy, RBI said, could focus more on boosting growth after the reform actions get executed.
"While government has embarked on a fiscal adjustment path, staying on this course over the medium-term is necessary for providing sufficient space for monetary policy to stimulate growth," RBI said.
In the past couple of months the government has taken a host of reforms initiative including opening the multi-brand retail chain to foreign direct investment (FDI), and also the Union Cabinet has approved hiking foreign investment limits in the insurance and pension sectors.
Earlier this month, the government also allowed partial deregulation of diesel prices, besides limiting the number of subsidised LPG cylinders to nine per family a year.
"Fiscal risks have somewhat moderated in 2012-13, but a sustained commitment to fiscal consolidation is needed to generate monetary space," RBI said.
Due to risks from high inflation and high current account and fiscal deficits the scope for supportive monetary policy action is constrained, says the central bank ahead of its third quarter monetary policy
Mumbai: Citing high inflation and widening current account deficit (CAD) as big constraints, the Reserve Bank of India (RBI) on Monday said there is limited scope for monetary actions like interest rate cut to boost growth in the third quarter policy to be announced on Tuesday, reports PTI.
“Given the preponderance of non-monetary factors behind the current slowdown in an environment where risks from high inflation, current account and fiscal deficits still remain, the scope for supportive monetary policy action is constrained”, RBI said in its report on Macroeconomic and Monetary Developments issued on the eve of policy.
The central bank, however, said that with the government executing economic reforms measures, it would be possible for the monetary policy to increasingly focus on revival of growth.
Meanwhile, the professional forecasters sponsored by the RBI have lowered the growth projection for the current fiscal to 5.5% from 5.6% projected earlier. They have also cut the growth forecast for the next financial year to 6.5% from 6.6%.
As regards inflation, RBI said it was likely to moderate below its projection of 7.5% by March-end. However, it added, “suppressed inflation continues to pose a significant risk to the inflation in 2013-14. As some of the risks materialises, inflation path may turn stick.”
Referring to recent reforms initiatives, it said, “(they) have reduced immediate risks, but there is a long road ahead to bring about a sustainable turnaround for the Indian economy. Business sentiments remain weak despite reform initiatives and consumer confidence is edging down.”
During the all-party meeting convened by the Centre on Telangana in New Delhi on 28th December last year, Shinde had said the issue would be resolved within a month while Chidambaram, on 9 December 2009 had announced on initiating process to create Telangana state
Hyderabad: A local court on Monday directed police to investigate into the allegations whether Union ministers Sushilkumar Shinde and P Chidambaram ‘cheated’ the people of Telangana region by their statements on the statehood issue, reports PTI.
Based on a complaint filed by Telangana Junior Advocates’ Association president Naresh Kumar, the Second Metropolitan Magistrate Court directed the LB Nagar police to investigate into the matter and file a status report before it by 14th February.
Kumar, in his petition, had mentioned about the statements of Shinde and Chidambaram on the Telangana issue and sought the court’s directions to refer the matter to the police for investigation under section 420 (cheating) of the IPC.
During the all-party meeting convened by the Centre on Telangana in New Delhi on 28th December last year, home minister Sushilkumar Shinde had said the Telangana issue would be resolved within a month.
On 9 December 2009, the then Union home minister P Chidambaram had announced on initiating process to create Telangana state. However, on 23 December 2009 Chidambaram modified the statement following an agitation in coastal Andhra and Rayalseema regions of Andhra Pradesh.
Meanwhile, Cyberabad Police Commissioner Ch Dwaraka Tirumala Rao said they were yet to receive the court orders in this regard.
Asked if the police would lodge any case against the Union ministers, the senior police officer said, “We have to first go through the order copy and act accordingly.”