The withdrawal of Rs 2,000 banknotes is likely to be a non-event as India has adopted digital payments on a mass scale, said SBI Research in its latest Ecowrap.
The moderation in the country's retail inflation in April has validated the Reserve Bank of India's (RBI) decision to pause the repo rate in its first 2023 monetary policy meeting, according to SBI Research.
Former RBI governor Raghuram Rajan earlier remarked that the economic growth of India was close to 'Hindu rate of growth'
Innovations in technology have changed the Indian payment system over the years and the Indian cash-led economy now has changed to a smartphone-led payment economy, said SBI Research in its latest Ecowrap report.
Much of the weakness in the rupee is on account of a strong US dollar index and not just because of India's domestic economic fundamentals, said SBI Research in its latest report.
Faced with elevated retail inflation in August, the Reserve Bank of India is expected to raise interest rates in the range of 35-50 basis points in its next monetary policy committee meeting, said SBI Research.
So, while the third wave seems to have achieved its peak in Mumbai, if other districts also implement strict measures to control the virus spread, the national peak may come within 2-3 weeks after the Mumbai peak, the report said.
The saving grace is the jump in non-tax revenue of around Rs 32,335 crore or 20 bps of fiscal deficit, possibly reflecting the AGR payments/interim dividend from RBI in lieu of telecom.
The report explains that a part of the reason why the shortage is being felt could be the introduction and faster-acceleration in printing Rs 200 notes
