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RBI has rightly flagged issues like MSP, fiscal slippages

RBI has rightly flagged certain issues like the impact of MSP revision on the prices and possible fiscal slippages at both the Centre and the states, ASSOCHAM President said 

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Stating that the decision of the Reserve Bank of India’s Monetary Policy Committee to keep the benchmark lending rates unchanged is on the “expected” lines, the ASSOCHAM on Thursday concurred with the assessment of the central bank regarding upside risks to inflation arising from possible fiscal slippages, volatility in crude prices and revised formula for the Minimum Support Price (MSP) for Kharif crops.
 
"The RBI has rightly flagged certain issues like the impact of MSP revision on the prices and possible fiscal slippages at both the Centre and the states," said ASSOCHAM President Sandeep Jajodia. 
 
He said, RBI Governor Urjit Patel has also highlighted the unfolding risks from the trade protectionism. "Those who thought the threat of a trade war was not real may be in for a surprise as is evident from the retaliatory measures by China on imposing tariff on imports from the US, though there are talks of negotiations," the ASSOCHAM said.
 
The chamber shared concerns of the RBI about the urgent need for de-leveraging of the corporate balance sheets as also re-building of the bank balance sheets. The RBI's macro numbers like inflation forecasts as also the GDP look real and variables like Monsoon, crude oil prices in an election year would be the factors to watch for.
 
The RBI's move to study and examine the feasibility of virtual currency is laudable and is in line with the changing technology eco-systems.   

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