Monetary Policy Committee (MPC) Member Nagesh Kumar has said that the ongoing economic slowdown in the country has become serious enough to demand immediate policy attention. Advocating for 25 basis points (bps) cut in the repo rate during the December MPC meeting, Kumar highlighted the urgent need to address the dual challenges of declining growth and inflationary concerns. He said ‘The extent of the slowdown is serious enough to warrant policy attention’.
According to the minutes of the meeting released by the Reserve Bank of India (RBI), Kumar emphasized that economic conditions have worsened significantly since the October 2024 MPC meeting. He pointed to a steep decline in India’s economic growth. The GDP growth rate for Q2 of 2024-25 has dropped to 5.4 per cent, compared to 6.7 per cent in Q1 of the same fiscal year and 8.2 per cent in 2023-24. He noted that this decline is sharper than expected and has led to a broad-based downgrade in GDP growth forecasts for the year. In light of these developments, he argued that a 25 bps rate cut could help revive economic growth without exacerbating inflation. He added that inflationary pressures might ease with seasonal corrections in prices, creating space for supportive policy measures.
He stated ‘I believe that a rate cut would help in reviving economic growth without worsening the inflationary situation, which may soften with seasonal correction in prices. Hence, I will again vote for a 25-basis point cut in the repo rate while keeping a neutral stance’. Additionally, he recommended exploring non-rate measures to improve liquidity in the economy. He suggested a 50 bps cut in the Cash Reserve Ratio (CRR) as one of the measures to enhance liquidity and support economic recovery. The December MPC meeting minutes reflect growing concerns over the state of the economy, with two out of the 6 members voting for reducing the policy rates. While other four members including former RBI Governor Shaktikanta Das voted to keep the policy rates unchanged. The next meeting of the MPC is scheduled for February 5 to 7, 2025.
MoneyWorks4Me rating and ranking of funds for SIP is available to subscribers only. Moneyworks4Me is not a rating and ranking agency, however it is required that users have a way of selecting funds and building a Portfolio. The method used by it are described below to enable users to understand the logic behind the rating and ranking Subscriber will find more details on this in the various content made available from time to time. In case you need more please write to besafe@moneyworks4Me.com
MoneyWorks4Me rates and ranks mutual funds based on the following data-driven system:
Funds ranking in screeners: Performance Consistency and Quality are two parameters used for ranking funds for SIP. The ranking as follows GG, GO, GR, OG, OO, OR, RG, RO and RR.
With the same color-coded funds, the one with the higher Average 3-year rolling returns (over 5 to 10 years), the number that appears in the Performance tag, ranks higher.
Here is the summary:
The third tag Upside Potential is not relevant for SIP. It is relevant for lumpsum investments in Mutual Funds.
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