Helping You Build Wealth With Honest Research
Since 1996. Try Now

MEMBER'S LOGIN

MEMBER'S LOGINX

     
Invalid Username / Password
   
     
   
     
 
Invalid Captcha
   
 
 
 
(Please do not use this option on a public machine)
 
     
 
 
 
  Sign Up | Forgot Password?  

Markets will remain closed on April 17, 2024 on account of Ram Navami.

Growth at the RBI's discretion?
Wed, 15 Dec Pre-Open

The Indian central bank has played its part well. Whether it comes to reigning inflation or stimulating growth. All this without allowing too much of cheap liquidity to percolate into the economy. With the monetary policy review approaching, all eyes are again on the RBI. But is it possible for the RBI to control all factors affecting the economy's growth potential? We don't think so. And a chain of events that have unfolded in recent days confirm this belief.

Indian policy makers used their vested interests to obstruct 22 consecutive days of parliamentary session. The deadlock reportedly came at a cost of Rs 1.7 bn to Indian taxpayers. Needlless to say that the funds could have been used more productively in a capital starved nation like hours. But priorities are clearly misplaced. The lost hours have deferred debate on critical reforms that could have been growth catalysts.

Commodity prices have assumed new highs in recent months. And cartels like the OPEC have ensured that essential inputs like crude oil get dearer in the days ahead. The impact of such decisions on inflation is clearly beyond the RBI's control.

The importance of better infrastructure to India's growth cannot be emphasized enough. However, a plethora of social and bureaucratic barriers have dogged investment into the same. Issues relating to land acquisition and environmental clearances assume prominence here.

Thus markets may be enthused with inflation number coming at a 11- month low. It may be assumed that the RBI will pause on its interest rate hike policy this time. But does that mean higher growth for the economy? Very difficult to say indeed. For as we have cited here, there are several factors beyond the central bank's scheme of affairs. And they have the potential to thwart even the best intentions of the RBI.

For information on how to pick stocks that have the potential to deliver big returns, download our special report now!

View all commentaries | Archives

Read the latest Market Commentary


Equitymaster requests your view! Post a comment on "Growth at the RBI's discretion?". Click here!

  
ABOUT EQUITYMASTER

Since 1996, Equitymaster has been the source for honest and credible opinions on investing in India. With solid research and in-depth analysis Equitymaster is dedicated towards making its readers- smarter, more confident and richer every day. Here's why hundreds of thousands of readers spread across more than 70 countries Trust Equitymaster.

PREMIUM PRODUCTS
QUICK LINKS
POPULAR TOPICS
TRENDING TOPICS
FREE NEWSLETTERS
EQUITYMASTER SUPPORTS
  • HelpYourNGO
  • You Tube
  • Linkedin
  • Twitter
  • Telegram
  • Google Play

Copyright © Equitymaster Agora Research Private Limited.

Whitelist | Refer | Terms | Privacy | Contact | About | Sitemap

Phone +91-9136015013

Equitymaster Agora Research Private Limited (Research Analyst)
SEBI (Research Analysts) Regulations 2014, Registration No. INH000000537.

103, Regent Chambers, Above Status Restaurant, Nariman Point, Mumbai - 400 021. India.
Telephone: +91-22-61434055. Email: info@equitymaster.com. Website: www.equitymaster.com.
CIN:U74999MH2007PTC175407

Name of the Compliance & Grievance Officer: Ms Sonal Ramachandran
Telephone: +91-22-61434003 | Email: compliance@equitymaster.com

LEGAL DISCLAIMER:
Investment in securities market are subject to market risks. Read all the related documents carefully before investing.
Registration granted by SEBI and certification from NISM in no way guarantee performance of the intermediary or provide any assurance of returns to investors.

All rights reserved. Any act of copying, reproducing or distributing this newsletter whether wholly or in part, for any purpose without the permission of Equitymaster is strictly prohibited and shall be deemed to be copyright infringement.

Equitymaster Agora Research Private Limited (Research Analyst) bearing Registration No. INH000000537 (hereinafter referred as 'Equitymaster') is an independent equity research Company. Equitymaster is not an Investment Adviser. Information herein should be regarded as a resource only and should be used at one's own risk. This is not an offer to sell or solicitation to buy any securities and Equitymaster will not be liable for any losses incurred or investment(s) made or decisions taken/or not taken based on the information provided herein. Information contained herein does not constitute investment advice or a personal recommendation or take into account the particular investment objectives, financial situations, or needs of individual subscribers. Before acting on any recommendation, subscribers should consider whether it is suitable for their particular circumstances and, if necessary, seek an independent professional advice. This is not directed for access or use by anyone in a country, especially, USA, Canada or the European Union countries, where such use or access is unlawful or which may subject Equitymaster or its affiliates to any registration or licensing requirement. All content and information is provided on an 'As Is' basis by Equitymaster. Information herein is believed to be reliable but Equitymaster does not warrant its completeness or accuracy and expressly disclaims all warranties and conditions of any kind, whether express or implied. Equitymaster may hold shares in the company/ies discussed herein. As a condition to accessing Equitymaster content and website, you agree to our Terms and Conditions of Use, available here. The performance data quoted represents past performance and does not guarantee future results.