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India central bank seen holding rates, room for cuts narrows | Reuters

MUMBAI India’s central bank is likely to keep its policy rate unchanged on Tuesday, following a big cut two months ago, and to sound cautious about the scope for more easing as it aims to meet its 2017 inflation target and braces for a U.S. rate hike.

All 45 respondents surveyed by Reuters last week expected the Reserve Bank of India to hold the repo rate INREPO=ECI at 6.75 percent, after easing it by 50 basis points at its last policy review in late September.

RBI Governor Raghuram Rajan will also likely reiterate an “accommodative” stance in his statement, in the wake of data on Monday showing the economy grew 7.4 percent in the July-September quarter, faster than China but below the government’s goal of 8.0 to 8.5 percent growth.

But analysts are less certain about whether Rajan will cut the rate early in the new year. Although India will comfortably meet its target of keeping annual consumer inflation INCPIY=ECI to 6 percent in January, Rajan is expected to shift focus towards getting it down to around 5 percent by March 2017.

That’s an ambitious target for a country that less than two years ago suffered double-digit inflation. A recent pay hike to government employees and potential food price shocks could easily push up consumer price inflation from the 5 percent hit in October, analysts warned.

Meanwhile, the Federal Reserve is widely expected to raise U.S. rates in December for the first time in nearly a decade.

Although India has outperformed other emerging markets over the past two years, the country is not immune to Fed-related worries.

Concern about selling by foreign investors sent the rupee INR=D2 to a two-year low on Friday. During November, it lost more than 2 percent against the U.S. dollar, one of the worst performances in Asia, as foreign investors sold $1.5 billion in bonds and stocks.

A. Prasanna, an economist at ICICI Securities Primary Dealership Ltd in Mumbai, doubts that Indian interest rates can be cut before April.

“It is very difficult for inflation to sustain below 5 percent in India,” he said.

RBI Governor Rajan has eased the repo rate by 125 basis points since January, as inflation has eased thanks in large measure to a prolonged slump in commodity prices.

However, Rajan has been mindful of becoming dependent on this windfall. He has pushed the government to pass reforms and resolve problems such as poorly kept roads and historically high spending that has kept inflation high in India.

The governor has spent months improving the country’s defences against a Fed hike, building up foreign exchange reserves to near a record high of $352.37 billion, enough to cover about 10 months of imports.

(Editing by Richard Borsuk)

This story has not been edited by Firstpost staff and is generated by auto-feed.

Intolerance debate: Why so much hullabaloo over Aamir Khan’s statement, asks Nagma

She wondered why so much hullabaloo has been created over his statement on “intolerance” when similar sentiments have been expressed by some other prominent personalties.

Actress and Congress member Nagma on Friday came out in support of Aamir Khan over his comments on “growing intolerance” and said the superstar never thought of leaving India, as she slammed BJP leaders like Yogi Adityanath over their remarks. She wondered why so much hullabaloo has been created over his statement on “intolerance” when similar sentiments have been expressed by some other prominent personalties. Asked by reporters to comment on Khan’s statement, the filmstar-politician shot back “kaun sa pahad toot gaya hai desh par (what big trouble his statement has caused)?” The 40-year-old “Baaghi” actress criticised BJP leaders like Yogi Adityanath for targeting Khan.<!– Dna_Article_Middle_300x250_BTF –>”When did Aamir say he wants to leave the country? There is a false propaganda against him. He never said he wants to leave India.” The 50-year-old actor has featured in advertisements for the Government of India and does not belong to any political party, she said. The General Secretary of All-India Mahila Congress had come to Jambusar town in Bharuch district to campaign for party candidates contesting the taluka panchayat polls slated for November 29.President Pranab Mukherjee, RBI Governor Raghuram Rajan and Infosys co-founder NR Narayana Murthy, among others, have also spoken on the issue of intolerance, she said. The Congress politician took potshots at Prime Minister Narendra Modi over his frequent foreign visits, saying “he should be issued an NRI (Non-Resident Indian) passport”. Nagma alleged law and order situation is deteriorating in BJP-ruled Gujarat, where she claimed attacks on women are increasing. She criticised the Gujarat government for extending soft loan at 0.1 per cent interest to Tata Motors for their Nano car plant in Sanand near Ahmedabad.

October CPI numbers: Pick-up in retail prices rules out a December rate cut by Rajan

Both the retail inflation data and the factory output numbers released on Thursday failed to offer any encouraging signs. The retail inflation continued to inch up, rising to 5 percent in October from 4.41 percent in September and 3.74 percent in the month before, mainly on account of price pressures on food items such as pulses.

Food inflation, an important component of overall inflation, escalated to 5.25 percent in October, as compared with 3.88 percent in September and 2.20 percent in August. The price of pulses rose 42 percent in October, despite the efforts by the government in recent months to rein in the price increase through imports and by curbing hoarding.

Representational image. Reuters

Representational image. Reuters

“Below-normal rains and shifts in sowing patterns have pushed up pulses/ lentils costs sharply in the past quarter, necessitating a step-up in imports and administrative measures to quell prices. Vegetable prices meanwhile rose 2.4 percent in Oct, from a flat print month before,” Radhika Rao, economist at Singapore-based DBS bank said in a note.

The government has seized about 1.33 lakh tonnes of pulses through raids across India, of which over 4660 tonnes have been offloaded in the open market in five states, hoping to cool down pulse prices.

The October retail inflation numbers have largely come as a surprise to most economists, who were expecting a lower number. Analysts polled by Bloomberg had forecast a retail inflation number of 4.9 percent. Partly, this is due to the base effect since inflation has been on a downtrend in the same time last year. On a lower base last year, inflation rise will show high a number now.

But, what is important to note here is that the increase in inflation for three consecutive months would put the Reserve Bank of India (RBI) on a cautious mode as the apex bank is set to unveil its next bi-monthly review of monetary policy in the first week of December.

This diminishes the chances of any further easing in the key rates, even though the central bank has repeatedly said it is confident of achieving the near-term 5.8 percent inflation target by January.

“On policy, renewed concerns that the sharp rise in food prices might lift generalised price pressures and inflationary expectations, will keep the central bank from aggressively easing policy further. After the bunched-up 50 bps cut in Sep and ahead of the widely-anticipated lift-off in the US rates by end-year, we expect the Reserve Bank of India (RBI) to pause in December,” Rao said.

The central bank has so far cut its key lending rate, repo rate, by a cumulative 125 basis points (bps). The banking sector has passed on only a fraction of that rate cut to the end-consumer, mainly on account of their cracked balance-sheets and tepid loan demand from quality borrowers. One bps is one hundredth of a percentage point.

Factory output weak

The Index of Industrial Production (IIP) showed economic activities slowing down in September, both on investment side and manufacturing activity. The IIP fell to a 4-month low of 3.6 percent in September, mainly by weak manufacturing growth and lower consumer spending.

The manufacturing sector, which accounts for three-fourth of India’s factory output, grew 2.6 percent compared with 6.9 percent in the preceding month and 2.7 percent in the year-ago period.

More worryingly, growth in capital goods, which is an indicator of investment activity in the economy, grew at a visibly slower pace of 10.5 percent in September compared with 21.8 percent growth in August and 12.3 percent in the corresponding period in previous year.

Consumer non-durables segment contracted by 4.6 percent during the month, compared with a mild growth of 0.4 percent in the preceding month and a growth of 1.3 percent in the corresponding period in the previous year.

There is a risk in forming an opinion in looking at a single month’s factory output data since many components such as capital goods growth are volatile. But, for now, the September numbers do not give any room for optimism as far as growth recovery is concerned.

Many sectoral components such as manufacturing and electricity generation have been showing mixed trends in the recent months and most economists believe that it is too early to conclude that sustainable economic recovery has taken hold on the ground.

As the central bank is moving to a new monetary framework, where the government will have an equal say in monetary policy setting under the proposed Monetary Policy Committee (MPC), there will be more pressure on the RBI to be sensitive to the growth concerns of the government. But with inflation hovering in close proximities of the central bank’s upper band (5.8 percent by January, 2016), it is unlikely that Raghuram Rajan will tinker with rates in December.

Why the prickly right wing is wrong in slamming Raghuram Rajan: He was minding his own business

By Sreemoy Talukdar

Right wing intellectuals in India, it would seem, are still a rudderless, reactive conglomerate more interested in picking up petty fights than developing a cogent ecosystem that resists the misinformation and manipulation machinery of the well-oiled ‘secular’ brigade.

This was evident in the way some of those sympathetic to the right of centre formation started criticising Dr Raghuram Rajan shortly after the RBI Governor delivered a lecture at an IIT convocation in Delhi on Saturday.

If one were to go through the speech of Dr Rajan, it is evident that he makes a series of generalised statements which draw on centuries of western liberal thought and tries to show how a participatory democracy which constantly challenges itself with new ideas can end up ensuring robust economic growth.

While some of his remarks, in isolation, may be twisted to serve the confirmation bias, there is very little evidence to show that he was making subtle points against the incumbent government at the Centre.

Here’s an excerpt:

RBI director Raghuram Rajan. ReutersRBI director Raghuram Rajan. Reuters

RBI director Raghuram Rajan. Reuters

“So what does an educational institution or a nation need to do to keep the idea factory open? The first essential is to foster competition in the market place for ideas. This means encouraging challenge to all authority and tradition, even while acknowledging that the only way of dismissing any view is through empirical tests. What this rules out is anyone imposing a particular view or ideology because of their power. Instead, all ideas should be scrutinised critically, no matter whether they originate domestically or abroad, whether they have matured over thousands of years or a few minutes, whether they come from an untutored student or a world-famous professor.”

When it comes to “fostering competition” among ideas, it points to the stranglehold that the leftists enjoy over every conceivable position in organisations that shape intellectual capital, refusing to allow contrarian views to develop among impressionable minds.

When the RBI governor talks about exchange of views, tolerance and mutual respect while criticising rival ideas, it could just as accurately be applied to the thought-mafias in India who are now shedding liberal tears over what they perceive as “crisis of intolerance” and yet are hysterically intolerant when it comes to accepting that human perceptions differ, their paths of reaching conclusions differ.

Dr Rajan goes on to say:

“…Groups should not be looking for slights any and everywhere, so that too much is seen as offensive; the theory of confirmation bias in psychology suggests that once one starts looking for insults, one can find them everywhere, even in the most innocuous statements…”

For a section of the intelligentsia afflicted with a curious case of insultatitis and suffering from the hallucination of approaching jackboots of fascism, this statement calls for a more level-headed approach.

All the more pity then when the right wing allows pseudo-leftist mafia to appropriate Dr Rajan’s general observations and helps them

make a case

where there is none.

If the right-wing (if there is indeed such an ecosystem, even if nascent) stoops to criticising Dr Rajan, it would point to an absolute bankruptcy of intelligence which, in turn, has made the job easier for the “left-liberals” in India.

Extracted from a Facebook post of the author, with permission.

Tolerance the best bet for growth, says Raghuram Rajan

Addressing a convocation at IIT, Delhi, Rajan said excessive political correctness stifles progress. He said that protection of the right to question and challenge was essential for India to grow.

Reserve Bank of India (RBI) governor Raghuram Rajan on Saturday became the latest votary of tolerance and mutual respect. Progress and growth are linked to the environment of tolerance and mutual respect, he said. Addressing a convocation at IIT, Delhi, Rajan said excessive political correctness stifles progress. He said that protection of the right to question and challenge was essential for India to grow. Rajan’s words come a day after international rating agency Moody’s Analytics cautioned Prime Minister Narendra Modi that India may lose domestic and global credibility if he doesn’t rein in his party members.<!– Dna_Article_Middle_300x250_BTF –> Mumbai-born music maestro Zubin Mehta, who is here for a concert, also joined the debate, speaking against the attacks on writers and artists who have returned awards and also criticised the attack on Sudheendra Kulkarni, chairman of Observer Research Foundation, by the Shiv Sena in Mumbai on October 12. He said India’s tradition of debate and open spirit of enquiry was critical for economic progress. On whether ideas or behaviour that hurt a particular intellectual position or group be banned, he said: “Possibly, but a quick resort to bans will chill all debate as everyone will be anguished by ideas they dislike. It is far better to improve the environment for ideas through tolerance and mutual respect. He further said while the thuggish mischief makers are there in every group, tolerance and respect lead to a good equilibrium.” On Friday, Moody’s had said that controversial comments from various ruling BJP members amidst the raging beef controversy were not helping the government. “While PM Modi has largely distanced himself from the nationalist jibes, the belligerent provocation of various Indian minorities have raised ethnic tensions,” said Moody’s. It asked the government to deliver on the promised reforms to reach the growth potential. Over the past few weeks, more than 40 writers, 12 film-makers and three scientists have returned awards to condemn the killing of writers and rationalists like MM Kalburgi, Govind Pansare and Narendra Dabholkar. Some 53 historians, including Romila Thapar, Irfan Habib and KN Panikkar, in a joint statement, have expressed serious concerns over settling differences through physical violence. “Arguments are met not with counter-arguments but with bullets,” the statement said, referring to the lynching of a man in Uttar Pradesh over rumours that he ate beef and the ink attack on Sudheendra Kulkarni in Mumbai. A group of scientists have also petitioned the President to initiate suitable action against incidents of intolerance.

RBI Governor Raghuram Rajan wants a cut in rate of rising intolerance in India

New Delhi: Amid a raging debate over intolerance, Reserve Bank of India Chief Raghuram Rajan on Saturday said excessive political correctness stifles progress and called for an improved environment for tolerance and mutual respect.

Rajan also said protection of right to question and challenge was essential for India to grow.

Raghuram Rajan. PTIRaghuram Rajan. PTI

Raghuram Rajan. PTI

Speaking at the convocation of IIT Delhi, the RBI Governor said actions that physically harm anyone or show verbal contempt for a particular group, so that they damage the group’s participation in the marketplace for ideas, should certainly not be allowed.

“Sexual harassment, whether physical or verbal, has no place in society. At the same time, groups should not be looking for slights any and everywhere, so that too much is seen as offensive; the theory of confirmation bias in psychology suggests that once one starts looking for insults,
one can find them everywhere, even in the most innocuous statements,” he said.

On whether ideas or behaviour that hurt a particular intellectual position or group be banned, he said: “Possibly, but a quick resort to bans will chill all debate as everyone will be anguished by ideas they dislike. It is far better to improve the environment for ideas through tolerance and mutual respect.”

He also said that tolerance can take the offense out of a debate, and instill respect.

“Tolerance can take the offense out of a debate, and indeed instill respect. If I go berserk every time a particular button is pressed, rebels are tempted to press the button, while mischief-makers indeed do so,” he said.

“But if I do not react predictably, and instead ask button pressers to explain their concerns, rebels are forced to do the hard work of marshalling arguments. So, rebels do not press the button frivolously, while the mischief makers who abound in every group are left without an easy trigger,” Rajan said.

He added that tolerance and respect then lead to a good equilibrium where they reinforce each other.

With inputs from PTI and IANS

Arun Jaitley hails Supreme Court order on Aadhar card

The apex court had on Thursday permitted citizens to voluntarily use Aadhar card for availing benefits under schemes like MGNREGA, Prime Minister’s Jan Dhan Yojana and all types of pension schemes and PF. “Supreme Court order permitting voluntary use of Aadhar is a positive step forward,” Jaitley said in a tweet.

Aadhar card

Finance Minister Arun Jaitley on Friday said the Supreme Court order on Aadhar is a positive step forward and will encourage voluntary use of the identification number.The apex court had on Thursday permitted citizens to voluntarily use Aadhar card for availing benefits under schemes like MGNREGA, Prime Minister’s Jan Dhan Yojana and all types of pension schemes and PF. “Supreme Court order permitting voluntary use of Aadhar is a positive step forward,” Jaitley said in a tweet.<!– Dna_Article_Middle_300x250_BTF –>Aadhar, an unique identification number, is used by the government to transfer subsidy directly to the bank account of beneficiaries. The use of Aadhar helps in checking pilferage. The Reserve Bank Governor Raghuram Rajan too had welcomed the ruling on use of Aadhar yesterday, saying that it will help in financial inclusion drive and provide easy access to loans. “The Supreme Court ruling on Aadhar card will be quite helpful, making us use it in banking services. It will make easier for financial inclusion,” Rajan had said.

dna Afternoon Must Read: From allowing dance bars to reopen in Maharashtra to Zaheer Khan’s retirememt and more

Go through the curated list of afternoon news.

Here is a list of curated must read for the afternoon.1. Supreme Court allows dance bars to reopen in Maharashtra, puts ban on holdSupreme Court has allowed dance bars to function in Maharashtra again. It has put on hold a 2014 law, which imposed a ban on operation of dance bars in the state. SC, however, has given power to licensing authorities to regulate indecent dance performances. This is an interim order and the final order will be given on November 9. Read more here.<!– Dna_Article_Middle_300x250_BTF –>2. A special surprise for SRK fans on his birthday!Shah Rukh Khan has always created a buzz about his movies amongst his fans right from the time that they are announced. With his three releases Dilwale, Raees and Fan, the ‘Baadshah of Bollywood’ has surely a great year ahead . Another note that you can add is, our superstar will turn 50 this year on November 2. This year the superstar and his team have added a special surprise for all his fans. His team is planning to release the second teaser of his upcoming movie Fan on his special day. Read more here.3. Zaheer Khan to announce retirement from international cricketOne of the best pacers of the Indian team, Zaheer Khan is set to announce retirement from international cricket on Wednesday. The veteran pacer had been struggling with injuries for a lengthy period of time and has been in and out of the game very frequently. Read more here.4. Breather for Adani, coal mine project gets go-ahead in AustraliaIndian mining giant Adani’s plan to build one of the world’s largest coal mines got a new lease of life on Thusday after the Australian government gave its re-approval to the 16.5 billion controversy-hit project but with “strictest conditions” amid environmental concerns. Read more here.5. No more rate cuts by RBI’s Raghuram Rajan for next 18 months?The Reserve Bank of India is forecast to cut its main lending rate just once more over the next 18 months, despite weak inflation and a slowing economy.India’s central bank to cut the repo rate to a 4 1/2-year low of 6.75% last month, taking many by surprise. But the RBI is unlikely to move again any time soon, according to the poll of over 25 economists taken in the past week, and the next cut of 25 basis points won’t come until the April-June 2016 quarter. Read more here.(With Agencies)

Samjhauta Express cancelled due to local agitation: India

The Indian response came as Pakistan summoned India’s Acting Deputy High Commissioner S Raghuram and expressed concern over the cancellation of operation of Samjhauta Express yesterday due to farmer protest on the Indian side, leaving over 200 passengers from both countries stranded.

Rejecting charges that it had “stopped” Samjhauta Express, India on Friday said it was cancelled due to local agitation and Indian authorities had informed their Pakistani counterparts about it in advance.The Indian response came as Pakistan summoned India’s Acting Deputy High Commissioner S Raghuram and expressed concern over the cancellation of operation of Samjhauta Express yesterday due to farmer protest on the Indian side, leaving over 200 passengers from both countries stranded.Asked about reports in the Pakistani media that the Samjhauta Express was “stopped” by India yesterday, Ministry of External Affairs Spokesperson Vikas Swarup said, “Samjhauta Express was among 75 trains traveling through Punjab that were cancelled due to local agitation, including rail blockade.”<!– Dna_Article_Middle_300x250_BTF –>”Indian Railway authorities had informed in advance their Pakistani counterparts that the train would not be able to run in such a situation,” he said.Swarup said as a number of Indians scheduled to travel to India from Pakistan could not do so, the Indian High Commission in Islamabad is in touch with the Pakistan government to ascertain their numbers and ensure that all necessary assistance is extended to them.”MEA has requested Indian Railways to work with authorities concerned in Punjab to resolve the situation at the earliest, and put extra bogies for catering to stranded passengers on both sides for the next run of the train normally scheduled for 11-12/10,” he said.Over 200 Indian and Pakistani passengers of Samjhauta Express were yesterday stranded at the Wagah railway station for over five hours after the train was not allowed to leave for Attari because of the farmers’ protest on rail tracks in Punjab.A Pakistan Railways spokesman said the Samjhauta Express, which ferries passengers from Pakistan on Mondays and Thursdays, would now leave for Attari on Monday.

Want to mentor a child? Green Batti project is here for you!

NOBLE IDEA: India’s largest one-on-one mentoring programme targets 5,000 pairs across four cities in the country by next year.

The Green Batti project pairs young professionals with children from under resourced communities. In an exclusive interview, Samyak Chakrabarty speaks to Krishna Bahirwani to reveal the details. Q What inspired you to start Green Batti?A Three years ago, I had adopted a primary school in Dharavi which was about to close down as the government stopped funding it. All the 150 kids faced at the risk of not getting educated. I involved myself in the management and started my efforts to improve the learning experience for these kids. Following frequent personal interactions, I realised that they lacked positive adult role models due to their prevailing socio-economic condition. This directly impacted their academic performance, confidence level, lateral thinking abilities and problem-solving skills. Both parents would always be out at work and most fathers were raging alcoholics who took little or no interest in their child’s life. Around the same time, I happened to be in New York and there met with senior officials from Big Brother Big Sister — the pioneers of one-on-one mentoring. I thought their model, if localised, can potentially fill this gap in the lives of children from the under resourced communities. Their team, in personal capacity, is currently mentoring us and we will very soon forge an official collaboration with them. I also frequently interacted with the Teach for India team on other projects and realised that something like this should be extended beyond just my school.<!– Dna_Article_Middle_300x250_BTF –> Q What makes Green Batti unique?A One, we have a structured curriculum unlike other programmes which is designed to deliver the impact areas (life skills, social skills, financial literacy and exposure to technology). Two, our entire programme is managed by a unique web-based server that has the capability to monitor safety and impact. This is an essential tool since unlike other programmes we intend to scale up. Three, we also have programme extensions such as a collaboration with new age music composer Sanaya Ardeshir where we are using music to instill creativity, self expression and confidence. Four, we create value addition for our mentors too such as masterclasses by Raghuram Rajan (RBI governor) and Suhel Seth (Brand guru). Q How do you select mentors for Green Batti?A After an online application, they must appear for an interview to ascertain their ability to deliver the mentoring curriculum, a 3-layer background check and finally an exhaustive training by Tata Institute for Social Sciences. These are mandatory steps for anyone to become a mentor. Q What has the response been like so far?A We are in our 3rd cycle now with 1,000 mentor-mentee pairs making us India’s largest one-on-one mentoring programme. Our target is 5,000 pairs across 4 cities by next year.Q How can one participate?A By visiting our website www.thegreenbattirproject.in and applying to be a mentor

July WPI prices fall 4.05 percent | Reuters

NEW DELHI India’s wholesale prices fell at a faster-than-expected annual rate of 4.05 percent in July, their ninth straight decline and their lowest in at least a decade, mainly driven by weak food and fuel prices, government data showed.

The data, released on Friday, compared with a 2.8 percent year-on-year fall forecast by economists in a Reuters poll and a provisional 2.4 percent annual decline in June.

The wholesale food prices fell 1.16 percent year-on-year, while fuel prices fell 12.81 percent from a year ago.

India’s retail inflation has cooled to a record low of 3.78 percent in July, adding pressure on the central bank chief Raghuram Rajan to cut interest rates after China devalued its currency this week.

The Reserve Bank of India kept rates unchanged at 7.25 percent this month even though the government and industry have been urging for lower cost of borrowing.

(Reporting by Manoj Kumar; Editing by Malini Menon)

This story has not been edited by Firstpost staff and is generated by auto-feed.

Rajan sees little impact of Greece crisis on India | Reuters

STOCKHOLM Reserve Bank of India Governor Raghuram Rajan said on Wednesday that the Indian economy will see through any impact of the Greece crisis.

One factor helping India was its stronger foreign exchange reserves, Rajan added in a conference at the Stockholm School of Economics.

(Reporting by Alistair Scrutton and Johan Sennero)

This story has not been edited by Firstpost staff and is generated by auto-feed.

dna impact: Banks sometimes don’t report frauds, says Raghuram Rajan

Reserve Bank of India (RBI) governor Raghuram Rajan has promised action against the guilty in the cheating and forgery cases that have led to the loss of Rs 27,000 crore in the last five years.He was reacting to a report, ‘Banks no safe havens for your money,’ front-paged by dna on April 8. He told ZEE Business that “we will examine the matter and book the culprits”.”Frauds do happen – both small and big. We need to tackle them, otherwise frauds will increase,” he said.”We need to find out how it happens. We have to do in a sensible way. Sometimes banks don’t report frauds. We are working on how to improve banks and will keep looking at frauds,” said Rajan.<!– Dna_Article_Middle_300x250_BTF –>dna had reported how cheating and forgery have led to public and private sector banks losing as much as Rs 27,000 crore cumulatively in the last five years. The information was obtained by dna under the Right to Information (RTI) Act. Several thousands of depositors have lost their money, and, in a majority of cases, recovery did not happen.Even this is just a conservative estimate with actual losses being several thousand crores. More than 11,500 cases of cheating and forgery cases involving Rs 1 lakh and above were reported by banks to RBI.

Services sector in India sees moderate expansion in December: HSBC survey

Services sector activity in India expanded in December, but at a slower pace as firms received lesser number of new orders as compared to the previous month, a monthly HSBC survey said today. In November, the sector had recorded fastest pace of expansion in five months.The HSBC India Services Business Activity Index, which tracks changes in activity at Indian services companies on a month-by-month basis, stood at 51.1 in December — down from 52.6 in the previous month, indicating a moderate expansion in business activity in December. A score above 50 indicates that the sector is expanding, while a figure below that level means contraction.”Both activity and new orders in India’s services sector expanded in December, though at lower rates compared with November,” HSBC Chief India Economist Pranjul Bhandari said. Within the services sector activity, all but the financial intermediation sub-sector saw an expansion in order books. “In our view, growth in financial intermediation is key for funding a meaningful pick-up in economic growth,” Bhandari added.Meanwhile, staffing levels in the Indian service sector increased in December, reversing the trend recorded in the previous month. Business confidence strengthened in December, despite slowdowns in growth of activity and new orders. The degree of positive sentiment among Indian service providers was robust overall, HSBC said.Meanwhile, the headline HSBC Composite Output Index — that maps manufacturing as well as services sectors output — stood at 52.9 in December, down from 53.6 in November.Private sector activity in India witnessed the 8th consecutive month of growth and was mainly driven by manufacturing output, which rose at the quickest pace in two years in December.On price rise, Bhandari said that “inflationary pressures from both input and output prices remained modest”.RBI Governor Raghuram Rajan, during the last monetary policy review in December 2014, kept interest rate unchanged, saying that a shift in stance is ‘premature’ but hinted that a cut may come in early 2015 if inflation continues to ease and government acts on the fiscal side. Accordingly, the repo rate continues to be at 8% while the cash reserve ratio has also been retained at 4%.