The RBI cut policy rates by 25 bps to 6.25 per cent (voted 4-2) and changed the monetary policy stance from ‘calibrated tightening to ‘neutral (unanimous vote). Some key points from the Monetary Policy Committee (MPC) meet are as follows:

* The MPC cut its CPI forecasts, with Q4 FY19 now being forecast at 2.8 per cent year-on-year (versus the lower-than-expected actual print of 2.6 per cent in third quarter (Q3) financial year 2019 (FY19) and previous forecast of 2.7-3.2 per cent for second half or H2 FY19) and first half or H1 financial year 2020 (FY20) at 3.2-3.4 per cent (previously 3.8-4.2 per cent).

* Consumer Price Index (CPI) for Q3 FY20 is forecast at 3.9 per cent. It assessed the risks to be broadly balanced around the central trajectory versus ‘tilted to the upside’ earlier. The MPC noted its benign food inflation outlook, softer prices of items in the fuel-group, complete dissipation of the recent HRA hike and its current judgment of the recent jump in health and education CPI components to be a one-off phenomenon. 

* However, it highlighted the reversal in vegetable prices, unclear oil price outlook, rising trade tensions, volatility in financial markets and the impact of various budget announcements, although only over a period of time, on increasing disposable incomes as upside risks.

* On GDP growth, it noted slowing global growth/demand, rising trade tensions and the recent pickup in bank credit growth not being broad-based as headwinds. 

* It projected FY20 real GDP growth at 7.4 per cent (7.2-7.4 per cent in H1 and 7.5 per cent in Q3), with risks evenly balanced. Further, it mentioned the output gap has inched lower than potential — the earlier assessment was that it had closed — and the need to step up private investments and support consumption. On the global front, it acknowledged the recent moderation in economic activity in the US, Euro Area and China.

There are some significant takeaways. The rate cut decision taken by the MPC is understandable, although the market, including ourselves, had assigned a less-than-even chance of that happening today. 

This is largely owing to the context provided by the Budget and the expectation that the recent jump in core CPI, although owing largely to rural health and education, may cause RBI to take more time in its assessment. 

However, the cut can be justified owing to the persistent undershoot in headline CPI as well as more sanguine global environment, including worries on global growth. Indeed, that has been our framework for sometime now. 

What stands out, however, is that the assessment is considerably more sanguine on almost all aspects. As an example, the RBI Governor actually stepped in to defend the Goods and Services Tax (GST) collection targets set by the government in the new budget; one which has been viewed with suspicion by most. 

Also, the impression given is that the new revised CPI targets take into account the possible impact from the consumption stimulus offered by the government in the Budget.

The policy clearly has the stamp of the new Governor. Assessments are bolder and interpretations are more sanguine. There is clear benefit of the doubt for the Government. 

Also, the focus seems conclusively back on headline CPI. All this means that the market may look forward to at least one more rate cut, given that the near forecast for CPI remains sanguine.

Against this tailwind, however, the government is slated to borrow Rs 36,000 crore extra in this financial year and a higher than expected Rs 7,10,000 crore in the next financial year. The obvious implication is for the yield curve to steepen as the market is called upon to take higher supply at the duration part of the curve. 

In duration, our preference would be for quasi like SDL and corporate bonds rather than Government bonds. While in supply there is a near-term problem, it typically dissipates into the new financial year. Also, starting spreads there are already reflecting higher supply. The most sustainable trade, however, is in 2-5-year AAA corporate bonds.

Reserve Bank of India (RBI) has reduced its lending rate by 0.25 per cent to 6.25 per cent with the monetary policy committee voted 4:2 in the favour of a rate cut. The RBI has also changed its stance to “neutral” from existing “calibrated tightening”. The ‘repo rate is a key interest rate at which the Central Bank lends short-term funds to commercial banks.

RBI has received a proposal for an umbrella organisation for urban cooperative banks. RBI has decided on this positively. A decision on the specifics of the umbrella organisation proposal will be taken shortly, reported news agency.

According to Indian Express reports, the reverse repo rate under the LAF now stands adjusted to 6.0 per cent and the marginal standing facility (MSF) rate and the Bank Rate to 6.5 per cent.V

RBI has recieved a proposal for an umbrella organisation for urban cooperative banks. RBI has decided on this positively. A decision on the specifics of the umbrella organisation proposal will be taken shortly.4

The GDP projection for 2019-20 is 7.4 %. The inflation rate is estimated at 3.2-3.4% in the first half of the year 2019-20 and 3.9 % in the third quarter of 2019-20, said RBI Governor Shaktikanta Das.

“Headline inflation is expected to remain contained below or at its target of 4%. This has opened space for policy action. Investment activity is recovering supported mainly by public spending on infrastructure,” RBI Governor said.

Export growth on a year-on-year basis was almost flat in November and December 2018, primarily due to a high base effect and weak global demand.

RBI has decided enhancement of collateral free agriculture loan from Rs 1 lakh to Rs 1.6 lakhs. This enhancement Rs 60,000 has been taken in view of the overall rise in inflation, marginal agriculture input and benefit to small farmers.

RBI Governor Shaktikanta Das said, “we are constantly & continuously monitoring the liquidity situation and based on the requirement we will ensure that there is no liquidity scarcity.”

Agencies

Nasheman News :  Private airline Jet Airways on Wednesday introduced a staggered framework to reward its domestic guests with substantially lower penalties in exchange for advanced intimation for changes in their bookings including cancellations, changes.

The new policy would be implemented from February 7.

“As part of the new policy, charges for various changes including those for flight, date, sector, booking class, cabin and others and refund penalties for ticket cancellations at least seven days prior to the date of travel would attract lower penalties compared to those who undertake booking changes within seven days,” Jet Airways, said in a statement.

“The dynamic penalties will reward guests who plan in advance with substantial savings,” it added.

Nasheman News : The Reserve Bank of India (RBI) has imposed separate monetary penalties on lenders — UCO Bank, Axis Bank and Syndicate Bank — over deficiencies in complying with different regulatory norms.

The RBI imposed a penalty of Rs 2 crore each on UCO Bank and Axis Bank for non-compliance with its circular on ‘Collection of Account Payee Cheques – Prohibition on Crediting Proceeds to Third Party Account’ and Master Directions on ‘Frauds – Classification and Reporting by commercial banks and select FIs’.

In addition, a separate penalty of Rs 20 lakh was imposed on Axis Bank for contravention of the directions contained in ‘Master Circular on Detection and Impounding of Counterfeit Notes’ and, the ‘Circular on Sorting of Notes – Installation of Note Sorting Machines’.

In another statement, the RBI said it has imposed a penalty of Rs 1 crore on the government-owned Syndicate Bank for non-compliance with the directions contained in ‘Master Circular on Frauds – Classification and Reporting’ and ‘Circular on Risk Management Systems in Banks’.

Sheela Foam, makers of Sleepwell & market leader in Indian PU Foam industry, has today announced launch of its entry into home comfort segment with Sleepwell Home Comfort Product Range. The new range offers a bouquet of Concept Pillows, Bed sheets with enchanting design themes, Luxurious Comforters, Warm Blankets & Mattress Protectors thus offering consumers a “Total Sleep Solution” all under 1 roof along with its innovative range of mattresses & pillows.

 In line with vision of offering best in class sleep experience, Sleepwell Home Comfort Products would be available across all Sleepwell Outlets in India.

 Sleepwell’s Home Comfort Products are backed by its deep understanding of sleep science, rich experience of over decades, the use of finest quality materials & hi-tech product features. Every product in this range is designed with care & understanding of unique sleep & comfort requirements of individual consumers, to provide best in class comfort & sleeping experience. 

Addressing the press Rakesh Chahar, CEO & Director, Sheela Foam said that with launch of entire range of Home Comfort Products, Sleepwell brand is probably only 1 of its kind in the country that offers the customer a total sleep well solution.

 Naresh Mittal, MD of PMG, the distributor for Sleepwell products in Karnataka said that the launch of these products was a great boost for exclusive Sleepwell dealers & hoped that this will be an imetus for overall growth of the brand.

 Bhushan Pathak, Business Head, Home Comfort Products added that using Sleepwell’s unmatched knowledge of an individual’s sleep & comfort requirements, Sleepwell Home Comfort Products have been thoughtfully designed to enhance the overall sleeping experience of the consumers. These not only uplift the decor of the bedroom but also offer a blissful sleeping experience along with our mattress. 

The brand’s strength is not just dependent on its range of futuristic offerings for Mattress, Home Comfort Products & Furniture Cushioning applications, but is also a result of trust & security that its customers have invested in Sleepwell over last 5 decades. Sleepwell plans to introduce exciting themes, designs, colors & materials every quarter or season, depending on the product. The product offering is differentiated in the market by using finest quality in reactive prints, zero shrinkage combed cotton, softest & warmest materials & rich design & finish & scientifically designed products. 

Inspired by nature & science to offer health & hygiene, all sleepwell products are treated with unique Neem Fresche Technology that keeps the products fresh & safe by preventing breeding of dust mites, bacteria, fungi & it also eliminates bad odour. 

Sleepwell is a flagship brand of Sheela Group, India’s leading manufacturer of Polyurethane foam & an ISO 9001 certified company. It has 12 state of art manufacturing units, a strong support of over 100 plus distributors & over 6500 dealers in India. Sheela Group is a market leader in Indian P.U. Foam industry. 

Being one of Asia’s biggest Polyurethane Foam Manufacturer, it has over 4 & a half decade of extensive experience of making quality products backed by their state-of-the-art Research & Development labs.  

The revenue department will put in place within two years a mechanism to ensure that all returns are processed within 24 hours and refunds issued simultaneously, an official said.

The government has already sanctioned Rs 4,200 crore last month for upgradation of information technology infrastructure of Central Board of Direct Taxes (CBDT) for processing returns, refunds, faceless scrutiny and verification.

Revenue Secretary Ajay Bhushan Pandey said currently refunds are processed online in an automated manner. In the current year, refunds to the tune of Rs 1.50 lakh crore have been given directly in bank accounts.

Now the system is being further upgraded so that refunds can be received within 24 hours.

When asked about the timeline for implementing 24-hour refund, Pandey told media “We will try to do it as soon as possible, within the same time frame as faceless assessment, within two years”.

While presenting the 2019-20 interim Budget, temporary Finance Minister Piyush Goyal had said the Income Tax Department now functions online and returns, assessments, refunds and queries are all undertaken online.

“Last year, 99.54 per cent of income-tax returns were accepted as they were filed. Our government has now approved a path breaking, technology intensive project to transform the I-T Department into more assessee-friendly one. All returns will be processed in 24 hours and refunds issued simultaneously,” Goyal said.

The minister said within next two years, almost all verification and assessment of returns selected for scrutiny will be done electronically through anonymised back office, manned by tax experts and officials, without any personal interface between taxpayers and tax officers.

Anonymous returns scrutiny through back office, Pandey said “will also bring in transparency and minimise any subjectivity or human interface”.

Agencies

C All is set for the launch of India’s 40th communication satellite GSAT-31 early on Wednesday by an Ariane 5 rocket belonging to Arianespace, said the European space agency.

In a statement, Arianespace said the launch will be the first of the planned 12 missions in 2019 using its heavy-lift Ariane 5, medium-lift Soyuz and lightweight Vega rockets.

The Ariane 5 rocket will carry two satellites – Saudi Geostationary Satellite 1/Hellas Sat 4 and the GSAT-31.

According to the Indian Space Research Organisation (ISRO), the 2,535-kg GSAT-31 is the 40th communication satellite and would augment the Ku-band transponder capacity in geostationary orbit.

The ISRO said GSAT-31, with a mission life of 15 years, will be used for supporting VSAT networks, television uplinks, digital satellite news gathering, DTH television services, cellular backhaul connectivity and more.

The two Ku-band beacon downlink signals are transmitted by the satellite for ground tracking purpose, it said.

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Nasheman News :Union Minister and Lok Janshakti Party chief Ram Vilas Paswan called the Interim Budget 2019-20 the “second surgical strike” by the NDA government and said the opposition leaders looked “despondent”.

“The first surgical strike occurred on the border. Jawans fought it with bullets. Here, we will fight with ballots. People will decide that the NDA wins 400 seats. Narendra Modiji will be the Prime Minister (again),” he told reporters outside Parliament.

“Has anybody ever thought of such a big step for farmers?” he asked.

Equating the Budget with cricket, Paswan said it was “a sixer” and the opposition would not be able “to find the ball” until the Lok Sabha elections. 

Nasheman News : Finance Minister Piyush Goyal on Friday said the government has provided Rs 1,330 crore for the protection and empowerment of women, an increase of Rs 174 crore from last year.

“An amount of Rs 1,330 crore has been provided for 2019-20,” Goyal said while presenting the Interim Budget it in the Lok Sabha.

“While taking several welfare initiatives for women, the emphasis of the government has been to move from ‘women’s development’ to ‘women-led development’ during the last four and a half years.”

Goyal said that more than 70 per cent of the beneficiaries of Pradhan Mantri Mudra Yojana were women who were getting affordable and collateral-free loans to start their own businesses.

The Minister also added that maternity leave of 26 weeks have provided financial support to women while empowering them to participate in work.

He noted that the government embarked upon the Ujjawala Yojana to deliver eight crore free LPG connections and six crore connections have already been provided while the remaining will be given by next year.