In a rare interview and his first since he became RBI Governor, Patel on Friday opened up on the latest monetary policy decision and the factors that will curate the future interest rates.
With the impact of demonetisation still being felt inflation under control, the six-member Monetary Policy Committee will likely recommend a reduction of 25 basis points in key policy rate, feel economists.
April-August fiscal deficit has come at Rs 4.08 lakh crore, 76.4 percent of the FY17 estimate. The net tax receipt has come at Rs 2.8 lakh crore while the total spending has come at Rs 8.02 lakh crore, 40.5 percent of FY17.
Urjit Patel, 52, is currently a deputy governor and headed a committee on monetary policy reforms whose recommendations to set a inflation and create a new Monetary Policy Committee were backed by Prime Minister Narendra Modi's government.
WPI inflation climbs to near two-year high at 3.55 percent as against 1.62 percent month-on-month. Industrial inflation climbed to 1.8 percent from 1.17 percent last month.
The July Wholesale Price Index (WPI) contracted for ninth straight month to -4.05 percent against -2.4% in June on account of easing commodity and food prices.
For the April-May period, output rose 2.1 percent against 4.7 percent year-on-year (YoY).
Given the weakness in industrial output and downtrend in inflation, expectations of a rate cut by the RBI at its June meet have risen.
Rating agency Moody‘s has affirmed India‘s sovereign rating at BAA3, but raised the rating outlook to ‘positive‘ from ‘stable‘.
A CNBC-TV18 poll of analysts had estimated it November CPI at 4.4 percent against 5.52 and October IIP at 2.1 percent against 2.5 percent on a month-on-month basis.
The capital goods growth for the month of August stood at -11.3 percent versus -3.8 percent month-on-month. The manufacturing also contracted to -1.4 percent against -1 percent from the previous month.
A CNBC-TV18 poll of economists has estimated IIP to come in at 2.4 percent on the back of a pick up in industrial activity and better core sector numbers.
India's industrial production growth slowed to 0.6 percent in February from a year earlier, government data showed on Friday.
Banks and mutual funds in India are earning abnormally high returns in money markets by breaching the Reserve Bank of India (RBI) rules forbidding forward trades, multiple people involved in the practice said, undermining the effectiveness of monetary policy in the process.
India's industrial production rose by a higher-than-expected 2.7 percent in August from a year earlier, after contracting in July.
Indian wholesale price index rose a faster-than-expected 6.95% in February from a year earlier, mainly driven by a surge in food prices, government data showed on Wednesday.
The biggest priority before the government of India in the upcoming Union Budget is to resume aggressive fiscal adjustment. Failure to do so will jeopardize India’s sovereign credit rating and complicate efforts to lower interest rates (due to large-sized borrowings) and hinder growth.