New Delhi3 days ago
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FY 2025-26 budget arrived. Now the eye is on the Reserve Bank. It will be a meeting of the Monetary Policy Committee (MPC) between 5-7 February. Since the focus of the budget was on increasing consumption in the country, it is expected that the Reserve Bank will also help the government in this matter by reducing the interest rates. To increase the speed of economic growth in the country, it is considered necessary to increase consumption.
The budget has given great relief in income tax. Finance Minister Nirmala Sitharaman has tax-free income up to Rs 12 lakh annually. So far this limit of discount in the new regime was 7 lakh rupees. Anand Rathi Group co-founder and vice-chairman Pradeep Gupta said that income tax exemption is expected to increase consumption. Especially discretionary expenses can increase between middle and high-middle income groups.
Center hopes to get a dividend of Rs 2.5 lakh crore from Reserve Bank and Banks Economic experts, while analyzing budget documents, have estimated that the government may get a dividend of up to 2.56 lakh crore from RBI and public sector banks. In the last financial year 2024-25, the government received a total dividend of Rs 2.30 lakh crore.
This year the estimated amount may be even higher. According to experts, the fall of the rupee and the earnings from foreign currency assets can be the main reason for this increase.
Relief may be 4% inflation, increasing scope for reducing interest rates also Bajoria believes that inflation rate may come down to around 4% this year according to retail prices. In such a situation, the Reserve Bank should not face any problem in reducing policy rates. In the Society General, India’s economist Kunal Kundu said that the new Governor of the Reserve Bank Sanjay Malhotra is opposite to the previous Governor Shaktikant Das. Their policies are towards supporting the economy instead of being apprehensive about inflation. He will not hesitate to reduce the repo rate if needed.
Experts expect, this year can be cut by up to 1% in several stages. If the Reserve Bank reduces interest rates, then the burden of EMI on the common people will be reduced. This will save additional. Economist (India and Asia), an economist (India and Asia) of Bank of America Securities (India and Asia), Garima Kapoor, Economist Garima Kapoor, hopes that RBI will reduce the repo rate 0.25% to 6.25% in February.
The repo rate can be brought to 5.50% by the end of 0.75% in a phased manner and by the end of 2025. Also, the cash reserve ratio (CRR) can increase the cash in the RBI banking system by decreasing 0.50% or purchasing bonds from the open market.