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RBI’s cut in interest rates for the third time this year dominates newspaper headlines

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The lead across newspapers today is RBI’s cut in interest rates, for the third successive time, by 25 basis points. “To spur growth, RBI cuts interest rate, stance now accommodative”, reads The Indian Express’ headline.

The Times of India writes, “Repo rate lowest since 2010 after RBI’s third cut this year”. It add that the central bank “hinted at more cuts by changing its policy stance from neutral to accommodative”. The interest rate has been reduced from 6 per cent to 5.75 per cent.

Hindustan Times starts off by saying “corporate and consumer loans will become cheaper…in an attempt to reverse the slowdown in economic growth and boost consumer spending”. It adds, “If there was still any doubt on the RBI’s primary focus now, the central bank’s governor set it to rest”.

The Hindu reports that “the decision to cut interest rates was unanimous among the Monetary Policy Committee (MPC) members.”

Express agrees in its ‘Explained’ that the RBI’s ‘accommodative’ stance “reflects the imperative of the monetary policy to foster growth”. A mere 25 bps cut this time opens up the possibility of another rate cut if the monsoon progresses favourably and the government sticks to its fiscal consolidation path”.

HT also carries a report, “Consumers low on confidence.” The latest survey shows that “despondency has gripped urban India as far as economic sentiments are concerned”.

“The net share of respondents who think they will spend more, either now or a year from now, on non-essential items, has fallen to an all-time low since September 2015”, it states.

It also warns how “if these trends don’t reverse themselves very quickly, the already decelerating economic momentum in the economy could get worse.”

Rajnath Singh and Cabinet committees: While the two newly-appointed Cabinet committees, designed to boost investment and unemployment, made news on Wednesday, Friday’s focus was the rejig that made Defence Minister Rajnath Singh a member of six committees after his initial exclusion in two. Amit Shah, in the meanwhile, gets seat in all eight panels.

Headlines in Hindu and Express throw light on the likely ‘hiccup’ in the appointment of committee members, initially. Express writes: “All in a day’s work: Morning order omits Rajnath from key panels, he’s in by night” while The Hindu succinctly states: “Rajnath inducted into Cabinet panel following controversy”.

TOI and HT call the reshuffle “interesting.”

That initially Shah was included in all panels before Rajnath, “served as yet another proof of his status as the No. 2 in the saffron establishment”, writes TOI. Express agrees, saying how the appointments “gave rise” to talks which suggested Shah was the “de facto No. 2”.

Speaking of re-shuffle, the Niti Aayog has undergone some changes of its own. Most notably, “Bibek Debroy was not renominated”, TOI reports. The economist was earlier also the chairperson of the Economic Advisory Council to the PM. While the Express relegates this bit of news to its page 16, HT places it on page 15.

Others: Also making headlines is the “Delhi-Centre fight” (HT) that has broken out on the issue of providing free public transport for women in the national capital. TOI reports that Hardeep Puri, housing and urban affairs minister, has said that “neither his ministry nor Delhi Metro has received any proposal from the Delhi government”.

Azim Premji, “IT’s marathon man” (TOI), is set to retire, and makes column space on HT and TOI. “An era is ending at Wipro”, says TOI, dramatically.

Meanwhile, the Express is sarcastic about Pragya Thakur skipping her court hearing: “Pragya too unwell to be in trial court, but she is well enough to be here”, it reads, referring to her visit to Bhopal where she garlanded a statue of Maharana Pratap on his birth anniversary.

Opinion

Two varying views, this morning, on the RBI’s repo rate cut by 25 basis points.

Business Standard: ‘RBI votes for growth’ calls the reduction in interest rate “exactly what the doctor ordered”. At 5.75 per cent, the paper states, it is the “lowest in the last nine years” and driven by concerns of economic slowdown. RBI’s MPC has revised the GDP projections from 7.2 per cent to 7 per cent now.

MPC’s change in policy stance from ‘neutral’ to ‘accommodative’ also brought ‘cheer’ to the markets as it indicated an emphasis on “growth” – more repo cuts are expected in the future.

One disappointment that lurks is the lack of attention to ‘weak transmission of interest rates’. A “pick-up in the pace of monetary transmission’’ was a “key driver” for economic growth – the market had hoped for more than assurances that “adequate liquidity would be provided to the banking system”, writes BS.

The Economic Times: ‘RBI lobs the ball into government’s court’ is unimpressed by the central bank’s “tinkering’’ with rates. The repo rate cut, it states, “is neither here nor there’’ when it comes to addressing the fund “crunch’’ faced by builders and the infrastructure sector who depend on short-term financing from non-banking finance companies (NBFCs).

ET urges the government to think out of the box and follow examples such as the Troubled Asset Relief Programme in the USA which has rescued companies such as the-General Motors and several other banks. It argues that if the government doesn’t have the guts to make bold decisions it could ask “banks to give extra funds to viable projects‘’ without bankers having to fear going to the jail for their “rescue efforts’’.

Prime Time

While daytime news was preoccupied with PM Modi’s new Cabinet committees and India’s victory at the Cricket World Cup, the prime time debate returned to politics.

Zee News: Anchor Aman Chopra asked, ‘Mandir kab banega?’, a reference to Shiv Sena MP Sanjay Raut’s question, earlier in the day, on the contentious issue of the Ram temple. Chopra asked ‘toh mandir ab nahin banayenge to kab banayenge’ (if the Ram temple is not built now then when?) since the BJP has won the recent general elections with a massive mandate. To this, BJP spokesperson Sambit Patra replied that the saffron party would definitely build the Ram temple.

Muslim scholar Tasleem Rehmani observed that the BJP has said that it will build the temple “according to the Constitution” but other groups said they were already running out of patience and wanted the temple to be built immediately.

NDTV India: The channel examined BJP’s allegations that 54 workers were killed by TMC members in West Bengal for political reasons. NDTV examined 23 such cases and found that seven were fake.

TMC supporter Garga Chatterjee claimed that the BJP had ‘concocted’ this figure and sent it to “biased’’ media outlets which “keep repeating the number” so that the audience remembers it.

BJP leader Chandra Bose said there was clear evidence of communal violence in some areas of West Bengal and “TMC is completely responsible for it”.

India TV: Anchor Rajat Sharma commented on the most recent tiff between Punjab Chief Minister Captain Amarinder Singh and Navjot Singh Sidhu after the CM stripped Sidhu of key portfolios.

“Captain is trying to clip Sidhu’s wings”, Sharma said, and added that the two leaders were at loggerheads with each other. “While Singh chaired a cabinet meeting, Sidhu was holding his own press conference targetting Singh”, he said.

Mirror Now: The brutal killing of a two-year-old girl in Aligarh got anchor Faye D’Souza very indignant. “If the government is not able to see shortfalls in their own police officials, how will they resolve problems?” asked D’Souza.

Advocate and activist Abha Singh alleged that the state’s “system” has failed: “If cases such as this are happening in spite of strong laws, it only shows that the system and judiciary have failed”.

Social activist Bhayana Yogita alleged mishandling of the case.“It is a clear case of kidnapping and the police should have had common sense to understand this,” said Yogita.

India Today: Anchor Rajdeep Sardesai spoke about water crisis in top tier cities and discussed issues related to agriculture with rural affairs commentator P. Sainath.
Sainath pointed towards the discrepancy in water distribution, how urban areas get more water than rural parts. “Cities get 400 % more water. Also, in agricultural processes smart cropping has to be done in order to save wastage of water.”

Sainath also exposed the tanker industry racket: “Jhalna town in Maharashtra was able to generate millions for the tanker industry in 2015 with the vehicles being controlled by MLAs and ex-MLAs cutting across parties.”

Sardesai added that cities such as Delhi, Bangalore and Mumbai “can drink up their surrounding water within days”.

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(With inputs from Shailaja Bajpai, Harshit Mansukhani and Triya Gulati)

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