The government will not be able to ensure sustainable growth and control inflation unless the issue of soaring subsidy bill is addressed, Reserve Bank of India (RBI) Deputy Governor Subir Gokarn said.
Speaking at the South Indian Chamber of Commerce & Industry's 102nd annual general meeting, Mr. Gokarn said subsidy bill was the biggest single burden on government finances, and not dealing with subsidies would provide the country with only imperfect and incomplete solutions.
Reserve Bank of India (RBI) Deputy Governor Subir Gokarn admitted on Tuesday that the central bank is in the clutches of the monetary policy issues due to persistent inflation, and added that it did want to let inflation go out of control.
Speaking to reporters on the sidelines of India Investment Forum on Tuesday, Gokarn said they didn't want to risk upsetting durable sustainable growth by allowing inflation to soar further.
The deputy governor of the Reserve Bank of India (RBI), Mr. Subir Gokarn has said that the central bank has some room for reducing its key policy rates following moderation of core inflation and a fall in global crude oil prices.
The central bank had earlier indicated that its stand on monetary policy will depend on the level of oil prices in the international markets and the domestic economic growth rates. Mr. Gokarn said that the liquidity situation is comfortable in the economy citing a fall in bank's borrowing from the RBI.
India's central bank, the Reserve Bank of India (RBI) has started buying government bonds from the market this week because it believes that the pressure on liquidity could remain for longer than expected.
Subir Gokarn, a deputy governor of RBI said that the central bank is aware of the volatility in the foreign exchange markets and has tools to control the situation. The liquidity shortfall has remained at a level that is more than double of what RBI considers conformable.
According to the latest data released, the consumer prices in the country rose 6.89 per cent in the month of March from a year earlier compared to 6.95 per cent recorded in February.
The inflation has remained almost the same in the two months and this could increase make it more difficult for the RBI to consider a reduction in its key lending rates. Economists and industry members want the central bank to cut rates to give a boost to the slowing economic growth.
According to a new survey, leading economists believe that the inflation based on the Wholesale price index might have fallen slightly to the level of 6.7 per cent compared to 6.95 per cent that recorded in February.
The new poll of 30 economists conducted by Reuters showed that they expect the headline inflation to be at 6.7 per cent for March, year on year. The inflation in the country started moderating in November after staying above 9 per cent for a year. The inflation had fallen to a 26-month low of 6.55 per cent in January.
India’s central bank, the Reserve Bank of India (RBI) is most likely to announce a cut in its repo rate for the first time in three years in order to give a boost to the slowing economic growth in the country.
RBI's deputy governor Subir Gokarn had earlier indicated that RBI’s stand on monetary policy will depend on the level of oil prices in the international markets and the domestic economic growth rates.
Subir Gokarn, a deputy governor of the RBI has said that he expects the Indian economy to grow at around 7.5 to 7.6% in the current fiscal year amid signs of a global economic slowdown.
He acknowledged that the increase in interest rates have affected the growth in the economy. The RBI has been concerned over high inflation in the country and has raised the interest rates 13 times since March last year in order to try to control the high prices of commodities.
The Reserve Bank of India’s deputy governor said on Sunday, that monetary policy would be affected by events in Egypt.
Subir Gokarn, deputy governor at the central bank, said that when they had announced the policy on January 25, they had not anticipated events which would have impact on oil prices.
He further said that a complete new environment has been created in a very short time after the announcement.
On Wednesday Federal bond yields and trade relieved representing US Treasuries, but traders alleged that they could rise later in the day on apprehensions about a rate rise in November.
Subir Gokarn, a deputy governor at the Reserve Bank of India (RBI), said on Tuesday increase was well above the central bank's comfort zone. After this expectation for more monetary contraction was enthusiast.
While the central bank, Reserve Bank of India has recently announced a hike in the short-term borrowing rate (reverse repo) by 0.50 percent and lending rate (repo) by 0.25 percent in its quarterly review of the monetary policy, housing loan, auto loan, education loan are likely to move northwards from the next month.
It is to be mentioned here that repo rate is a rate at which the banks borrow funds from RBI and any increase in the same clearly means that borrowing will be more expensive.
Banks have appealed to the Reserve Bank of India (RBI) for easing norms for deals relating to lending in the infrastructure sector. The appeal is to help banks deal with the asset-liability mismatch.
The top bankers asked for a cut in savings bank rate during a pre-policy meeting with RBI Deputy Governor Subir Gokarn. The bankers expect to improve net interest margins with the cut in savings rate.
The asset-liability gap is rising as most new deposits have a shorter maturity term of around one year while the tenure for loans to infrastructure projects is of 15-20 years.
New Delhi, Oct 28 : Subir Gokarn, chief economist for Asia Pacific with global rating agency Standard and Poor's, will be appointed as a deputy governor of the Reserve Bank of India (RBI), Finance Minister Pranab Mukherjee said here Wednesday.
"It (the appointment) will be done in due course," Mukherjee said after a meeting with finance secretaries of states.
RBI has four posts of deputy governor, with one falling vacant after Rakesh Mohan quit in June.
Usha Thorat, K. C. Chakrabarty and Shyamala Gopinath are the other three deputy governors.
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