| RBI cuts repo rate by 25 basis points to 7.5 per cent |
 The Reserve Bank of India today cut repo rate by 25 basis points to 7.5 percent, signaling that it was convinced by the fiscal consolidation measures announced in the Budget. The RBI has kept the cash reserve ratio (CRR) unchanged at 4 percent. Reasoning behind the rate cut, the RBI said in its statement that disinflation is evolving along the path set out by the Reserve Bank in January 2014 and, in fact, at a faster pace than earlier envisaged. This is the second out of turn 25 basis point-cut after the one in January. The RBI also praised the fiscal consolidation measures announced in the Budget, despite the government extending its 3 percent fiscal deficit target by a year. The RBI also stated that the government has emphasized its desire to clean up legacy issues which gave a misleading picture of the true extent of fiscal rectitude, and has also moderated the optimism in its projections. To this extent, the true quantum of fiscal consolidation may be higher than in the headline numbers. Also, the government is transferring a significantly larger amount to the states, without entirely devolving responsibility for funding central programmes. To the extent that state budget deficits narrow, the general fiscal deficit will be lower. Furthermore, supported by lower international energy prices, there is a welcome intent to shift from spending on subsidies to spending on infrastructure, and to better target and further reduce subsidies through direct transfers. |
Save Dissent to Save Democracy THE rising instances of physical violence and threats against political opponents and the inability to accept dissent must raise huge concerns amongst all of us who see democracy as perhaps the really stellar achievement since Independence. AAP’s attack on BJP headquarters and acts of arson committed under the very noses of their elite leadership; the attacks on Arvind Kejriwal and Manish Sisodia in Gujarat in the last two days; the recent manhandling of the caretaker of journalist Siddharth Varadarajan’s house by some garden variety thugs; and the violence and threats meted out regularly to their political opponents by political parties is surely deplorable and condemnable. This is a fatally flawed trend which will destroy the very foundations of our democratic institutions if not pushed back with all the strength and condemnation that the civil society can mobilise. Replaying the past To begin with, it must be clarified that we should ...
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