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New Delhi [India], July 21 (ANI): As the highly-anticipated <keyword id="19908389" type="General" weightage="20" keywordseo="Union-Budget" source="keywords">Union Budget</keyword> week commences on Monday, investors' sentiments in the <keyword id="19911354" type="General" weightage="20" keywordseo="equity-market" source="keywords">equity market</keyword> will be driven by the announcements made by <keyword id="7706673" type="General" weightage="20" keywordseo="finance-minister-nirmala-sitharaman" source="Orion">Finance Minister Nirmala Sitharaman</keyword>. <keyword id="6355261" type="General" weightage="20" keywordseo="Finance-Minister" source="Orion">Finance Minister</keyword> Sitharaman will present her seventh consecutive Union Budget on July 23. Last week, the Indian stock markets closed nearly unchanged after a period of strong gains, buoyed by positive global cues and a promising start to the earnings season. However, profit-taking on Friday erased earlier advances, leaving the Nifty index at 24,530.90 after reaching a high of 24,854.80. In the past week, sectoral stocks in FMCG and IT sectors maintained their upward momentum, while sectors like metal, energy, and media saw declines. Broader indices also slipped, experiencing losses between 2.2 percent and 2.9 percent. Interestingly, the market has historically reacted enthusiastically to the budget, as per BSE data. Between 2016 and the last interim budget announced in February, the market generally rose, except for the Union Budget of 2018, which saw a decline from 35,906.66 to 35,066.75, a drop of 8839.91 points. The highest jump was observed the day after the Union Budget announcement in 2021, when the Sensex rose by 1197.11 points, reaching 49,797.72 from the budget day figure of 48,600.61. Other significant increases were seen in 2017 with 777.35 points, 2018 with 84.97 points, the interim budget in February 2019 with 113.31 points, June 2019 with 792.82 points, 2020 with 136.78 points, 2021 with 1197.11 points, 2022 with 695.76 points, 2023 with 224.16 points, and 2024 with 440.33 points a day after the budget announcements. Meanwhile, foreign portfolio investors infused Rs 15,420 crore into the Indian equity market, according to data from the National Securities Depository. The net investment by foreign portfolio investors (FPI) surged to Rs 30,772 crore so far in July, indicating strong buying by foreign investors. Market experts suggest that foreign investors are investing in Indian markets amid a weakening dollar and bond yields. If this trend continues, foreign investment will likely persist. In the coming week, investors' sentiments will also be influenced by the April-June quarter results for fiscal 2024-25, foreign fund inflow, crude oil prices, global cues, and other data. "Looking ahead, the upcoming week holds significant importance for both equity markets and the overall economy. The Finance Minister will present the government's first budget on Tuesday, July 23, expected to largely follow the interim budget. Globally, US markets are also undergoing profit-taking after a strong surge, influencing market sentiments," said Ajit Mishra, SVP, Research, Religare Broking Ltd. "Market reactions will hinge on earnings reports from major players like Reliance Industries and HDFC Bank early in the week, before shifting focus to the Union Budget. Increased volatility is anticipated in subsequent sessions," he added.

Amid market volatility, investors await Finance Minister Nirmala Sitharaman's 7th Union Budget

<ul><li><keyword id="19991358" type="General" weightage="20" keywordseo="Indian-markets" source="keywords">Indian markets</keyword> started the week with a decline following global market weakness.</li><li>Indian markets are also facing selling pressure ahead of the <keyword id="19908389" type="General" weightage="20" keywordseo="Union-Budget" source="keywords">Union Budget</keyword> announcement.</li><li>The <keyword id="20641216" type="General" weightage="20" keywordseo="Nifty-50" source="keywords">Nifty 50</keyword> index declined by 100 points to 24,430, while the BSE Sensex lost 250 points to 80,391 during early trade on Monday.</li></ul>Indian markets started the week with a decline following global market weakness after U.S. President Joe Biden opted out of the presidential race. Indian markets are also facing selling pressure ahead of the Union Budget announcement by the government. The Nifty 50 index declined by 100 points to 24,430, while the BSE Sensex lost 250 points to 80,391 during early trade on Monday. In the broader market on NSE, the volatility index surged more than 3 percent, and all the indices, including Nifty Next 50, Nifty 100, Nifty Midcap, and Nifty Smallcap, faced selling pressure, trading in red during early trade. "Indian markets will look at the Union Government's <keyword id="20613906" type="General" weightage="20" keywordseo="Economic-Survey" source="keywords">Economic Survey</keyword>, to be tabled in the Lok Sabha at 1 pm. Though the Economic Survey is more of a strategic document, with aspirational notes on what could be done, the data points on growth and the government's assumptions on revenues and expenditure will be watched closely," said Ajay Bagga, Banking and Market Expert. On the impact of President Joe Biden opting out of the presidential race, Bagga added, "Markets had largely factored in a high probability of a Trump 2.0 Presidency and the Trump Trade was running. To that extent, markets should take this announcement in their stride and have a limited impact. The Democrat nominee finalisation around Kamala Harris and a VP-elect partner will be watched with interest. US futures are starting flat. We expect a limited impact on the markets for now." Elsewhere in the Asia-Pacific region, markets are predominantly trading lower. The Asia Dow shows a modest gain of 1.71 percent, contrasting with declines in Japan's Nikkei 225 by 0.77 percent, Hong Kong's Hang Seng index by 0.06 percent, and China's Shanghai Composite by 0.26 percent. In European markets, the UK's FTSE index declined along with the CAC index of France and the DAX index of Germany due to uncertainty in the U.S. elections. However, Dow Jones futures surged by 50 points to 40,336.42, while the S&amp;P 500 and Nasdaq closed with a decline last week. Interestingly, the market has historically reacted enthusiastically to the budget, as per BSE data. Between 2016 and the last interim budget announced in February, the market generally rose, except for the Union Budget of 2018, which saw a decline from 35,906.66 to 35,066.75, a drop of 839.91 points. The highest jump was observed the day after the Union Budget announcement in 2021, when the Sensex rose by 1,197.11 points, reaching 49,797.72 from the budget day figure of 48,600.61. Other significant increases were seen in 2017 with 777.35 points, 2018 with 84.97 points, the interim budget in February 2019 with 113.31 points, June 2019 with 792.82 points, 2020 with 136.78 points, 2021 with 1,197.11 points, 2022 with 695.76 points, 2023 with 224.16 points, and 2024 with 440.33 points a day after the budget announcements. Meanwhile, foreign portfolio investors infused Rs 15,420 crore into the Indian equity market last week, according to data from the National Securities Depository. The net investment by foreign portfolio investors (FPI) surged to Rs 30,772 crore so far in July, indicating strong buying by foreign investors. SEE ALSO:<a href="https://www.businessinsider.in/tech/mobile/news/google-pixel-9-pro-fold-to-launch-in-india-on-august-14-alongside-the-pixel-9-series/articleshow/111855704.cms" target="_blank"></a> <a href="https://www.businessinsider.in/tech/mobile/news/google-pixel-9-pro-fold-to-launch-in-india-on-august-14-alongside-the-pixel-9-series/articleshow/111855704.cms" target="_blank">Google Pixel 9 Pro Fold to launch in India on August 14 alongside the Pixel 9 series</a><a href="https://www.businessinsider.in/tech/mobile/webstories/oneplus-nord-4-vs-realme-gt-6t-which-mid-range-phone-should-you-buy-under-35000/slidelist/111803604.cms" target="_blank"></a> <a href="https://www.businessinsider.in/tech/mobile/webstories/oneplus-nord-4-vs-realme-gt-6t-which-mid-range-phone-should-you-buy-under-35000/slidelist/111803604.cms" target="_blank">OnePlus Nord 4 vs Realme GT 6T – which mid-range phone should you buy under ₹35,000?</a><a href="https://www.businessinsider.in/business/telecom/news/reliance-jio-and-airtel-added-3-45-million-subscribers-in-may-2024-while-vi-lost-nearly-a-million/articleshow/111800758.cms" target="_blank"></a> <a href="https://www.businessinsider.in/business/telecom/news/reliance-jio-and-airtel-added-3-45-million-subscribers-in-may-2024-while-vi-lost-nearly-a-million/articleshow/111800758.cms" target="_blank">Reliance Jio and Airtel added 3.45 million subscribers in May 2024, while Vi lost nearly a million</a>

Stock market opens in red, cautious ahead of Economic survey and Union budget

At a time when Indian markets are going through rough weather due to global crisis, there are hopes that the Sensex will go up after <keyword id="2783177" type="UNKNOWN" weightage="20" keywordseo="Budget-2016">Budget 2016</keyword>. 
 
If past data are analysed, they will reveal that Indian markets go strong after one month from the announcement of the budget. 
 
In past four instances, 2009, 2010, 2011 and 2014, Sensex showed upward trend around 5-10 per cent in one month post Budget. 
 
It is likely that people will buy stocks post Budget.

Buying stocks post Budget 2016 announcement can be a good option. Here’s why

The post-budget rally in the <keyword id="6357440" type="ENTERTAINMENT" weightage="100" keywordseo="stock-market">stock market</keyword> strengthened the BSE benchmark <keyword id="6484188" type="CITY" weightage="100" keywordseo="Sensex">Sensex</keyword> by over 10%, and made investors richer by more than Rs 8.91 lakh crore. 
 In March, the 30-share key index zoomed 2,339.86 points (or 10.17%), while <keyword id="6354813" type="COMPANY" weightage="100" keywordseo="nifty">Nifty</keyword> climbed 751.35 points (10.75%), marking the biggest monthly gain for stock markets over four years. 
 
This was the biggest post-budget day rally that Sensex ever saw, thanks to which it soared 777 points on March 1, which was also its best single-day show over past seven years. 
 
This positive momentum in the equity market led the investor wealth go up by Rs 8.91 lakh crore, making it stand at Rs 94.75 lakh crore. 
 
"The rally in the domestic market after the budget has been conceived by everyone as an affirmation to a good Union Budget 2016-17," said Paras Bothra, VP, Equity Research, Ashika Stock Broking. 
 
Talking globally, foreign investors put in more than Rs 21,000 crore in the Indian equity market in the month that went by, after a string of continued and huge pull outs in the last four months. 
 
In the future, investors hope for better quarterly earnings, stable global cues and more foreign money to flow in. 
 
"India is in a relatively stable position and is expected to continue to attract FII flows over the long term, as economic fundamentals remain stronger than other emerging market economies," Bothra added. 
 
<a href="http://www.businessinsider.in/photo/49333166.cms">Image source</a>

Post-budget rally helped investors earn Rs 9 lakh cr last month

<ul><li>The IPO will remain open for subscription until January 25, making it the third IPO of 2021 after <a href="https://www.businessinsider.in/stock-market/news/indian-railway-finance-corporation-irfc-ipo-will-open-on-january-18-and-remain-open-till-january-20/articleshow/80247173.cms">IRFC and Indigo Paints</a>. </li><li>The shares were commanding a premium of ₹90-100 in the grey market, over the set price band of ₹517-₹ 518 per share. </li><li>The company owned by a clutch of private equity investors had a network of 70 branches covering over 60 districts in 11 states in India on September 30— and its profit has grown nearly 5 times in the past three years. </li></ul>The ₹1,153 crore IPO of private equity funds Warburg Pincus-backed, <keyword id="8369767" type="UNKNOWN" weightage="20" keywordseo="Home-First-Finance">Home First Finance</keyword> Company (HFFC) is now open for public subscription. The IPO has opened days before the annual budget where Finance Minister Nirmala Sitharaman is expected to give added thrust for affordable housing while residential remains clogged with oversupply, at least in the big cities. The<a href="https://www.cnbctv18.com/real-estate/budget-brainstorm-know-whats-in-store-for-affordable-housing-8033451.htm"> expected government support</a> for the nearly ₹12 lakh crore affordable housing industry is only one of the many factors making Home First Finance’s IPO quite attractive. The lender has managed to grow its profit five times over in just the last three years. <div type="image" title="HFFC" msid="80381954" hostid="261"></div> The grey market is already paying a hefty premium for the shares The public issue of the mortgage financier garnered a decent response in the grey market — the shares were commanding a premium of ₹90-100 over the set price band of ₹517-₹ 518 per share. However, the grey market is not an official measure of the market premium. But it is a fair indicator of demand for the shares in the market. Nearly all the analysts' reports have given a 'subscribe' rating for the IPO, citing its resilient performance during the pandemic and increasing market share in home loans. Streets View: Home First Finance Company IPO <table style="border-width: initial; border-style: none;"></colgroup><tbody><tr><td style="border-left:solid #000000 0.9907650000000001pt;border-right:solid #000000 0.9907650000000001pt;border-bottom:solid #000000 0.9907650000000001pt;border-top:solid #000000 0.9907650000000001pt;vertical-align:bottom;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Brokerage </td><td style="border-left:solid #000000 0.9907650000000001pt;border-right:solid #000000 0.9907650000000001pt;border-bottom:solid #000000 0.9907650000000001pt;border-top:solid #000000 0.9907650000000001pt;vertical-align:bottom;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Recommendation </td></tr><tr><td style="border-left:solid #000000 0.9907650000000001pt;border-right:solid #000000 0.9907650000000001pt;border-bottom:solid #000000 0.9907650000000001pt;border-top:solid #000000 0.9907650000000001pt;vertical-align:bottom;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Ventura Securities </td><td style="border-left:solid #000000 0.9907650000000001pt;border-right:solid #000000 0.9907650000000001pt;border-bottom:solid #000000 0.9907650000000001pt;border-top:solid #000000 0.9907650000000001pt;vertical-align:bottom;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Subscribe </td></tr><tr><td style="border-left:solid #000000 0.9907650000000001pt;border-right:solid #000000 0.9907650000000001pt;border-bottom:solid #000000 0.9907650000000001pt;border-top:solid #000000 0.9907650000000001pt;vertical-align:bottom;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Angel Broking </td><td style="border-left:solid #000000 0.9907650000000001pt;border-right:solid #000000 0.9907650000000001pt;border-bottom:solid #000000 0.9907650000000001pt;border-top:solid #000000 0.9907650000000001pt;vertical-align:bottom;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Subscribe </td></tr><tr><td style="border-left:solid #000000 0.9907650000000001pt;border-right:solid #000000 0.9907650000000001pt;border-bottom:solid #000000 0.9907650000000001pt;border-top:solid #000000 0.9907650000000001pt;vertical-align:bottom;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Yes Securities </td><td style="border-left:solid #000000 0.9907650000000001pt;border-right:solid #000000 0.9907650000000001pt;border-bottom:solid #000000 0.9907650000000001pt;border-top:solid #000000 0.9907650000000001pt;vertical-align:bottom;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Subscribe </td></tr><tr><td style="border-left:solid #000000 0.9907650000000001pt;border-right:solid #000000 0.9907650000000001pt;border-bottom:solid #000000 0.9907650000000001pt;border-top:solid #000000 0.9907650000000001pt;vertical-align:bottom;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">ICICI Securities </td><td style="border-left:solid #000000 0.9907650000000001pt;border-right:solid #000000 0.9907650000000001pt;border-bottom:solid #000000 0.9907650000000001pt;border-top:solid #000000 0.9907650000000001pt;vertical-align:bottom;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Not Rated </td></tr><tr><td style="border-left:solid #000000 0.9907650000000001pt;border-right:solid #000000 0.9907650000000001pt;border-bottom:solid #000000 0.9907650000000001pt;border-top:solid #000000 0.9907650000000001pt;vertical-align:bottom;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Axis Securities </td><td style="border-left:solid #000000 0.9907650000000001pt;border-right:solid #000000 0.9907650000000001pt;border-bottom:solid #000000 0.9907650000000001pt;border-top:solid #000000 0.9907650000000001pt;vertical-align:bottom;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Not Rated </td></tr></tbody></table> The company owned by a clutch of private equity investors raised a little over ₹346 crore from anchor investors, ahead of its initial share-sale from 25 anchor investors including Nomura, Fidelity International, Morgan Stanley India Investment Fund, Goldman Sachs (Singapore), ICICI Prudential Mutual Fund, Nippon India MF and Tata AIA Life Insurance, among others. <div type="image" title="HFFC share holding" msid="80381934" hostid="261"></div> Justified valuation, healthy financials, strong network, substantial demand for affordable housing finance and much more — here’s what analysts have to say about the IPO <table style="border-width: initial; border-style: none;"></colgroup><tbody><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Growth </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Profit has more than doubled every year since financial year 2018 </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Network </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">70 branches across 60 districts in 11 states and union territories </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Management </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Manoj Viswanathan⁠— He has over 24 years of experience in the consumer lending </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Valuation </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Angel Broking says IPO is priced at 3.6 times the book value, nearly half that of its peer, Aavas Financiers, which is trading at 6.72 times. Lower multiple indicates more headroom for the stock to gain. </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Quality of loans </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Gross non-performing assets, simply put loans unlikely to be repaid, are at 0.7% as of Sep-end. Angel Broking calls it ‘stable’. </td></tr></tbody></table> The latest housing sales data has been exciting Even home sales, which have been sluggish for a few years, saw a sharp spike of 78% between September and December 2020, according to PropEquity. “Today stars are aligned for real estate activity in work from home. All of us here are one room short of our houses. I'm staying in a four-bedroom house. I want a fifth bedroom so that I can do my work properly. So there is customer demand. Real estate prices since 2016 have stagnated, or they have come down actually, so it has become more affordable to buy a house,” Nilesh Shah, Managing Director at Kotak Mahindra Asset Management⁠— and a part-time member of the Prime Minister’s Economic Advisory Council⁠— told Business Insider in a recent interview. <div type="Youtube" id="v02oeojB4Jk" title="One Of India's Money Managers Explained ‘The Mother Of All Bull Runs’ Using Amar, Akbar, Anthony" thumbUrl="https://i.ytimg.com/vi/v02oeojB4Jk/mqdefault.jpg"></div> "We expect the company to post strong growth driven by strong demand for affordable housing. Given the growth prospects, we recommend a subscribe rating on the issue," Angel Broking said in its report on Home First Finance. SEE ALSO: <a href="https://www.businessinsider.in/stock-market/news/sensex-crossed-the-50000-mark-for-the-first-time-ever-amid-a-global-stock-market-rally/articleshow/80379030.cms" data-type="tilCustomLink">Sensex breaches the historic 50,000 mark as Joe Biden's swearing in triggers a cheer in Indian markets</a> <a href="https://www.businessinsider.in/business/news/future-retail-reliance-deal-gets-sebi-approval-amazon-says-it-will-continue-to-fight-legally/articleshow/80378040.cms" data-type="tilCustomLink">Future Retail-Reliance deal gets SEBI approval, Amazon says it will continue to fight legally</a>

Warburg Pincus-backed Home First Finance’s ₹1,153 crore IPO has opened as markets hope budget will push for affordable housing

<ul><li>At its first meeting of the financial year and the only meeting before general <keyword id="6355644" type="DEFINITION" weightage="20" keywordseo="elections">elections</keyword>, the <keyword id="30067" type="ORGANIZATION" weightage="20" keywordseo="RBI">RBI</keyword>’s Monetary Policy Committee (MPC) slashed rates from 6.25% to 6%. </li><li>The back-to-back rate cut - the first since the MPC was instituted in 2016 - was largely in line with market expectations, given the fact that <keyword id="22195" type="COMPANY" weightage="20" keywordseo="Inflation">inflation</keyword> is still subdued and <keyword id="6368751" type="UNKNOWN" weightage="20" keywordseo="banks">banks</keyword> are being slow to transmit lower rates. </li><li>However, the RBI maintained its stance at “neutral”, indicating a slight uncertainty about monsoon and inflation forecasts in the latter half of the fiscal year. </li></ul>The Reserve Bank of India decided to cut rates again on April 4th At its first meeting of the financial year and the only meeting before general elections, the RBI’s Monetary Policy Committee (MPC) slashed rates <a href="http://downloadpolicy1.rbi.org.in/PR236465F5E32CDA894E1C8A45D87371A50D9E.PDF">from 6.25% to 6%</a>. The six-member committee voted 4-2 in favour of the cut. The back-to-back rate cut - the first since the MPC was instituted in 2016 - was largely in line <a href="https://www.businessinsider.in/heres-why-indias-central-bank-could-cut-interest-rates-again-this-week/articleshow/68666693.cms">with market expectations,</a> given the fact that inflation is still subdued and banks are being slow to transmit lower rates. A rate cut will boost lending growth as well as consumer and investor sentiment as India heads to the polls. In fact, the Sensex reached record highs of <a href="https://www.google.com/search?q=sensex&amp;rlz=1C1GCEU_enIN820IN820&amp;oq=sensex+&amp;aqs=chrome..69i57j69i60l3j0l2.2592j0j7&amp;sourceid=chrome&amp;ie=UTF-8">39,241 points </a>on Wednesday on expectations of another rate cut. However, the RBI maintained its stance at “neutral”, indicating a slight uncertainty about monsoon and inflation forecasts in the latter half of the fiscal year. Inflation is still subdued, which in turn, also exerts a downward pull on economic growth. 
 
 
 
 
 
 
 
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 Consumer price inflation rose to<a href="https://www.business-standard.com/article/economy-policy/retail-inflation-rises-to-4-month-high-of-2-57-in-february-2019-119031200605_1.html"> 2.57%</a> in February 2019 as fuel and electricity prices as well as the cost of household items like vegetables and dairy products increased. Despite hitting a 19-month low of 1.97% the previous month, it is still well below the RBI’s 4% target. India Ratings, a domestic ratings agency, expects <a href="https://www.indiaratings.co.in/PressRelease?pressReleaseID=36434&amp;title=-Fiscal-Stance%2C-Declining-Households-Savings-Impacting-Bond-Market-Yields-">inflation to stay subdued </a>in the near term as households prioritise savings over consumption. The data showed that the persistent decline in price growth has bottomed out due to a rebound in food and petrol prices. However, despite the recent uptick, inflation is expected to stay below the RBI’s medium-term target for the rest of the year. Tanvi Jain, of UBS Securities, <a href="https://in.reuters.com/article/india-economy-inflation-views/expert-view-indias-retail-inflation-picks-up-in-february-to-2-57-percent-idINKBN1QT1KJ">told Reuters</a> that headline core price inflation will be under 4% - the lower bound of the RBI’s target range - until October 2019 with an overall average of 3.8% for fiscal 2020. At its previous meeting in early February 2019, right after the government presented its interim budget, the RBI cut rates to 6.25% from 6.5% <a href="https://www.businessinsider.in/rbi-policy-update-cuts-interest-rate-citing-low-inflation-and-it-may-boost-growth/articleshow/67880230.cms">in a bid to boost economic growth </a>in the last quarter of the year. This was the central bank’s first rate cut in 18 months. At the February meeting, the six-member monetary policy committee, led by RBI Governor <keyword id="6359111" type="UNKNOWN" weightage="20" keywordseo="Shaktikanta-Das">Shaktikanta Das</keyword>, changed the bank’s policy stance from “calibrated tightening” to “neutral”, indicating a higher probability of a few more rate cuts this calendar year. The latest MPC decision comes amid cautious projections of growth. India's Central Statistics Office lowered the estimated growth rate for 2018-19 to 7% from 7.4%. At a press conference following the rate decision today, the RBI said that it had lowered its growth forecast for 2019-2020 to 7.2% from an original estimate of 7.4%. Yesterday, the Asian Development Bank also <a href="https://www.livemint.com/politics/policy/adb-cuts-its-india-gdp-growth-forecast-for-2019-20-a-day-ahead-of-rbi-policy-1554264352085.html">lowered its GDP growth</a> forecast for India this year from 7.6% to 7.2% owing to a weaker-than-expected rise in investment growth. Industrial production growth declined to a mere 1.7% in January 2019, compared to 7.5% a year ago, owing to weak capital goods spending by the government as well as sluggish electricity generation and mining output growth. It had recovered slightly the previous month from a 17-month low in November 2018. 
 
 
 
 
 
 
 
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 In a bid to spur growth and boost investor confidence, the RBI has also given liquidity support to markets through a $5 billion currency swap - a move <a href="https://www.business-standard.com/article/economy-policy/rbi-to-again-go-for-5-billion-dollar-rupee-swap-auction-on-april-23-119040200046_1.html">it is set to repeat later this month</a>. While the rate cut was received favourably by the market - the Sensex surged by over a 1000 points following the decision - some industry bodies felt that it wasn't enough given the slowdown in growth and inflation. 
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 SEE ALSO: <a href="https://www.businessinsider.in/heres-why-indias-central-bank-could-cut-interest-rates-again-this-week/articleshow/68666693.cms">Here’s why India’s central bank could cut interest rates again this week</a> <a href="https://www.businessinsider.in/indias-wholesale-inflation-rebounded-last-month-from-the-10-month-low-it-hit-in-january/articleshow/68404635.cms">India’s wholesale inflation rebounded last month from the 10-month low it hit in January</a> <a href="https://www.businessinsider.in/rbi-policy-update-cuts-interest-rate-citing-low-inflation-and-it-may-boost-growth/articleshow/67880230.cms">India’s central bank cuts interest rate to give growth a chance</a>

The Reserve Bank of India has cut interest rates for the second time in two months

Governor of <a href="http://www.businessinsider.in/searchresult.cms?query=RBI&amp;sortorder=effectivedate">Reserve Bank of India</a> (RBI), <a href="http://www.businessinsider.in/searchresult.cms?query=raghuram+rajan&amp;sortorder=effectivedate">Raghuram Rajan</a>, can be credited with introducing a host of initiatives in the <a href="http://www.businessinsider.in/searchresult.cms?query=indian+banking+&amp;sortorder=effectivedate">Indian banking sector</a> to spur growth and reduce bad debt. 
 
Apart from reforms, Rajan has also saved India from a major crisis. Remember <a href="http://www.businessinsider.in/searchresult.cms?query=lehman+brothers&amp;sortorder=effectivedate">Lehman Brothers</a> crisis in 2008? 
 Yes, Rajan, whose term ends in September this year, did enough to prevent the collapse of the <keyword id="183986" type="UNKNOWN" weightage="20" keywordseo="Indian-banking-system">Indian banking system</keyword>, that too very recently. 
 
"Even though the economic recovery is not happening at the desired pace, RBI and the bank boards have made it reasonably clear that they would not la Lehman moment occur in India," Saurabh Mukherjea, CEO Institutional Equities, Ambit Capital, said in an interview with ET Now. 
 
Rajan has many a time stressed that he would make sure India does not have to go through Lehman-like crisis. 
 
"The banking system is not going to the dog house and that is why I took the crisis call off the table. So, assuming a modest scenario of around 10 per cent earnings growth this financial year, it will lead Sensex to around 29,000-29,500 in FY17," said Mukherjea. 
 
Here are initiatives that RBI and the government took to sail banking system in the right direction 
 
Asset Quality Review (AQR): It was introduced by the RBI to make sure that banks were taking steps to clean up their balance sheets and reduce Non-Performing Assets (NPAs). 
 
<keyword id="3424182" type="UNKNOWN" weightage="20" keywordseo="indradhanush-scheme">Indradhanush scheme</keyword>: In a bid to resurrect some life in the public sector banks, the government will launch ‘<a href="http://www.businessinsider.in/searchresult.cms?query=indradhanush&amp;sortorder=effectivedate">Indradhanush’</a> and infuse Rs 70, 000 crore. 
 
The Indradhanush plan is already in works with an allocation of Rs 250 billion in the Union budget for 2016-17 for capital infusion into PSBs. 
It is expected that PSBs will raise the remaining Rs 1,10,000 crore from the market. Also, the government is committed to making extra-budgetary provisions in FY18 and FY19 too. 
 
Bankruptcy code- This will make companies and businesses to exit in a smooth manner and start afresh. The bankruptcy code will solve issues in a swift manner and ensure a data base of serial defaulters is in place. 
 
Structuring of stressed assets: This will enable banks to fight their own challenges over stressed assets coming from loans given to large companies that have turned sour. 
 
As per Crisil estimates, weak assets in the Indian banking system will touch 8 lakh crore by the end of this financial year. 
 
Transmission of repo rates: The banks haven’t passed on the slashed rates. The <a href="http://www.businessinsider.in/searchresult.cms?query=repo+rate&amp;sortorder=effectivedate">repo rate</a> stands at 6.50 per cent and the faster transmission would help credit growth in the system to pick up which has remained almost flat in the last 4-8 quarters. 
 
The banks have reduced their lending rates between 0.6% and 0.8% only. 
 
(Image: Indiatimes)

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