The RBI raised the repo rate by 25 basis points to fight rising food and fuel prices. The GST Council focused on process reforms at its 57th meeting to help taxpayers. Meanwhile, the Centre asked States to stop the sale of nicotine pouches to protect people from addiction risks.
After more than three years of neutrality, the RBI announced a new cycle of calibrated tightening and raised the repo rate by 25 basis points amid rising inflationary pressures driven by food and fuel prices. Commenting on the monetary policy, our Editorial says that the rate hike will be effective only if steps are taken to lift the weighted average call money rate to the repo rate. The Editorial also raised concerns about the liquidity overhang, which may push banks to lend to risky borrowers to recover servicing costs of FCNR(B) funds.
Heeding the warnings from the World Health Organisation, the Centre recently instructed State governments to crack the whip on the sale of nicotine pouches. Lauding the move, our Editorial hoped that the regulatory grey area is resolved soon and the sales of these products, which are engineered for addiction, are stopped swiftly.
GST Council took some significant decisions at its 57th meeting. The Council, our Editorial points out, has rightly turned its focus on process reforms. This, it says, will not only help existing taxpayers but can also expand the taxpayer base.
In his weekly column 'Line & Length', TCA Srinivasa Raghavan discusses the huge opposition to the Special Intensive Review (SIR) of voters list. He argues that the exercise should not be abandoned as there is a Constitutional requirement that it be conducted. Applying the Pareto Criterion, he says if the total gains from a change exceed total losses, the fairness and procedural question should be pushed back and the exercise undertaken.
In 'Foreign capital welcome, but should not dominate', Ashima Goyal points out that FCNR(B)'s success should prove that there are ways to get foreign capital without making concessions that create excess volatility. However, she calls for reforms to reduce transaction costs for foreign fixed income investors.
In 'Make in India, measured against the wrong decade',V Anantha Nageswaran, Kokila Jayaram and Sahar argue that the 10-12 years till now have been marked by progress despite the pandemic, tariff wars and armed conflict. Any comparison, they say, would have to be made with a long-term view.
In her column Point Blank, Lokeshwarri SK looks at the issue of mis-selling in insurance. The conceptual understanding about insurance products, she says, is quite low and insurance agents are making the most of this to earn higher commissions. To tackle this, she suggests creating an awareness campaign on the lines of 'mutual fund sahi hai'.