The Monetary Policy Committee (MPC) meeting that was conducted by the Reserve Bank of India (RBI) was held on Wednesday after a series of meetings that commenced on October 7. The meeting resulted in a number of major decisions which would have consequences not only for the majority of citizens but also for the entire economy of the country. RBI Governor Shaktikanta Das said the meeting was conducted and presented the major highlights.
Significantly, the RBI again left the repo rate unchanged at 6.5%, thereby extending the unbroken string of ten sequential meetings of no change in this key interest rate. This decision was made with a majority vote of 5:1. Economic performance of the RBI: The real Gross Domestic Product or GDP assessing the RBI financial year 2024-25 for the first quarter was at 6.7 percent, which shows a healthy sign for the Indian economy. Also, the investment to GDP contribution ratio increased up to its highest level from fiscal 2012-13, meaning that investors’ confidence is on the rise.
Unleashing the new gateway for digital transactions, the RBI recently decided to enhance the per transaction limit to Rs 10000 for the UPI 1, 2 & 3 systems from an earlier limit of Rs 5000. Also, the maximum transaction allowance for the UPI Lite wallets has been increased from Rs 2,000 to Rs 5,000 for better usability.
However, on the basis of this adjustment, the RBI has maintained the GDP growth estimates for the current financial year at 7.2%. The manufacturing sector is on the growth path, said Governor Das due to the firming up of domestic demand, lower input costs, and the right Government policies. He expected retail inflation to normalise to around 4.5% during FY’25 based on normal monsoons, with an indication that food inflation would progressively come down in the latter part of the year, further backed by normal monsoons and adequate stocks.
Promoting the strength and solidity of the finance sector, Das warned about risks associated with the accumulation of consumer loans as well as credit card sales.
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