Trump’s policy reversals will have implications for jobs and livelihoods in India
2 weeks, 6 days ago

Trump’s policy reversals will have implications for jobs and livelihoods in India

Live Mint  

Spectacular policy reversals in the United States have seized the news. Scheduled commercial banks had a total of 383 million loan accounts at end- December 2024, of which loans with a credit limit up to ₹25,000 accounted for 0.2 % of total credit by value. The threat to financial stability from this rise in unsecured lending made RBI—wisely—raise the risk weight on unsecured personal loans from 100% to 125% for banks and NBFCs in November 2023. Urban cooperative banks are an alternative source of small loans, but these banks naturally tend towards giving large loans to members of the cooperative society which owns them, and have been mired in misappropriation scams. The overall picture is that small loans for new livelihood seekers in urban settings are mostly sourced from informal finance, an opaque world which is only remotely touched, if at all, by formal monetary policy.

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History of this topic

Explained: Why Economic Survey 2024 has taken a cautious stance
8 months ago

Explained: Why Economic Survey 2024 has taken a cautious stance

India Today  

The Economic Survey 2023-24 has adopted a more cautious stance on India’s growth prospects, projecting an expansion of 6.5% to 7% for the fiscal year. Chief Economic Adviser V. Anantha Nageswaran highlighted that while the Indian economy remains resilient, it faces potential challenges from geopolitical uncertainties and the risk of cheaper imports that could impact private capital formation. "The Indian …

A path for the Indian economy to find its way out of the woods
4 years, 3 months ago

A path for the Indian economy to find its way out of the woods

Live Mint  

As much we would like to forget 2020, it is unlikely we will anytime soon. The rural economy accounts for almost half of India’s GDP and has done better than its urban counterpart, as reflected in the better performance of sectors with a rural footprint, such as tractors, two-wheelers, fertilizers and agrochemicals. Second, government support is tilted towards the rural …

India is vulnerable to a liquidity trap of its own
4 years, 4 months ago

India is vulnerable to a liquidity trap of its own

Live Mint  

Now that most big central banks across the world have exhausted their monetary firepower in response to the covid crisis, dropping their real policy rates of interest—adjusted for inflation—to negligible levels, the global economy is caught in a “liquidity trap”. “For the first time, in 60 per cent of the global economy… central banks have pushed policy interest rates below …

Note Ban Has Stained Modi’s Reputation, Writes Shashi Tharoor
8 years, 3 months ago

Note Ban Has Stained Modi’s Reputation, Writes Shashi Tharoor

The Quint  

In the meantime, thanks to the slow speed of the printing presses, cash is in short supply. The initial replacement notes have come in the form of an unusually high denomination that most people do not find useful – especially since the government’s failure to print additional quantities of smaller notes means that no one is able to make change …

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