X

Sign up for Equitymaster's free daily newsletter, The 5 Minute WrapUp and get access to our latest Multibagger guide (2018 Edition) on picking money-making stocks.

This is an entirely free service. No payments are to be made.


Download Now Subscribe to our free daily e-letter, The 5 Minute WrapUp and get this complimentary report.
We hate spam as much as you do. Check out our Privacy Policy and Terms Of Use.
Indian Stock Market News, Equity Market and Sensex Today in India | Equitymaster
  • MyStocks

MEMBER'S LOGINX

     
Login Failure
   
     
   
     
 
 
 
(Please do not use this option on a public machine)
 
     
 
 
 
  Sign Up | Forgot Password?  

RBI's big helping hand to the govt
Mon, 17 Aug Pre-Open

The Modi government has come in for a lot of criticism recently. Not living up to its tall pre-election promises seems to be the top complaint. It is true that the government has struggled to get the economy moving quickly. Squabbles with the RBI did not help matters. But the economic recovery was bound to be slow. The problems facing the government, when it took over last year, precluded a quick turnaround.

Thus it wasn't surprising there was very little to talk about initially. Now though, falling commodity prices have given the economy much needed comfort. The inflation and the fiscal deficit are slowly coming under control. But the good news does not stop there.

The Reserve Bank of India (RBI) has given the government a reason to be very pleased. As per news reports, the RBI has paid the highest ever dividend to the government. The amount; a staggering Rs 658.96 bn! We believe this will certainly help the government meet its fiscal deficit target. Public capex plans will also get a big boost. There's fiscal leeway now for some extra spending on infra projects.

In the face of all the talk about hostility between the RBI and the government, this is welcome news. We have always maintained that the RBI is a model central bank that has the economy's best interests at heart. It is distressing when the government's desire for lower interest rates has lead to an unnecessary rift with the central bank.

It is high time the government understands that cutting interest rates is not the only way the RBI can help the economy. It would be in the country's best interests if communication and co-ordination between the two is strengthened. With the RBI playing its part well, the ball is now in the government's court we believe.

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

Read the latest Market Commentary

Equitymaster requests your view! Post a comment on "RBI's big helping hand to the govt". Click here!

  

Small Investments
BIG Returns

Zero To Millions Guide 2018
Get our special report, Zero To Millions
(2018 Edition) Now!
We will never sell or rent your email id.
Please read our Terms

MARKET STATS