Does RBI Rate Cut Really Help Indian Economy?

RBI has had another round of interest rate cut on 4th April 2019.

What needs to be done to boost the Indian economy? What is the universally accepted answer to which RBI under Shaktikanta Das keeps obliging?

Share Market at Historical Highs

Sensex has crossed 39000. It is the historical peak for the Indian share market. It is bound to rise even further.

What needs to be done? RBI rate cut.

Make in India, Skill India and What Not India

The government of India has launched so many initiatives and steps to boost the Indian economy. All the schemes and programmes are doing great, as certified by Niti Aayog.

What needs to be done? RBI rate cut.

MUDRA loans

The government of India has given these many loans to these many entrepreneurs employing these many people. It has been a booster dose to the Indian economy.

What needs to be done? RBI rate cut.

Vibrant Gujarat, Bengal Means Business, Invest Karnataka

Every Indian state worth its salt organizes a Global Business Summit and each one of them is a resounding success. Bengal signed MoUs worth 2,84,288 Cr, this year. Gujarat signed 28,360 MoUs across 3 days, meaning an average of more than 1000 MoUs / working hour of the day.

What needs to be done? RBI rate cut.

India is the start-up capital of the world

India has so many start-ups. These start-ups employ so many people. India has become an envy of the world with the innovative and novel start-ups. They have raised so much of the venture capital.

What needs to be done? RBI rate cut.

Indian corporates are having great earnings season

Each quarter, the majority of the Indian corporates show spectacular YoY growth in revenues and profits. Their share prices are at their historical peaks.

What needs to be done? RBI rate cut.

The stubbornness of Indian Banks

In the past, RBI has reduced rates. However, Indian banks, be it public or private, refuse to reduce their rates. They increase lending rates the very next day of RBI rate increase. However, in the case of rate cut, they add it to their bottom line. RBI has not been able to make Indian banks to toe its line.

What needs to be done? RBI rate cut.

Easy Money

I, of course, understand the need for the rate cut to boost the economy. However, I also understand the hypocrisy going around to hard-sell the success stories that do not exist in reality at the same degree.

Even if one of the points mentioned above would deliver as highlighted by the press-release driven Indian media, Indian economy would surely be at the real high.

The government of India has faked the GDP growth numbers. For that numbers would be true, the rate cut would not have been required.

Everybody likes easy money sloshing around. But for the Indian depositors who keep the Indian economy going and bears the brunt of all the above.

Who cares? Sack Urjit Patel.

What needs to be done? RBI rate cut. If it fails, ask Shaktikanta Das for another rate cut.

Why not make it ZERO anyways?

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