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Monetary policy
Repo rate is down by .25 basis points and it continues to retain its accommodative stand. Repo rate now
stands at 6.5%, the lowest in 5 years.
Reasons for reduction
1. Bank lending is shifted to Marginal cost of funds based lending rate. It means rate reductions will
transmit to customers.
2. Food inflation is eased notably due to decline in prices and not as a result of the base effect.
3. Consumer confidence survey shows a positive sentiment and manufacturing purchasing
managers index reflects a continuing expansion.
Terms
Headline inflation
Core inflation
Manufacturing purchasing managers index
Base effect
About 10 voluntary disclosure schemes launched since 1951 and money recovered was merely
14,000cr. It is estimated that total money stocked overseas is greater than $505bn.
Justice MB shah chairman of the SIT on black money said India is too far away from making any
breakthrough on the hunt for black money.
US president Obama said that Panama papers show tax evasion as the major problem. The real
problem lies in loopholes in the tax laws.
In effective policy implementation, involvement of officers across the hierarchy is very crucial.
Group of joint secretaries has been tasked with formulating a blue print for effective
implementation of flagship programs.
Already Prime minister Is conducting once in a month review with secretaries of Union
Government and state chief secretaries on progress of various projects under implementation.
Bringing Joint secretaries in the loop can take this a step forward.
E- Pragati Proactive governance and timely implementation.
India USA
India has strongly reacted to the President Obama call for reduction of nuclear stockpiles in south
Asia as a possible lack of understanding of Indias defense posture.
USA clarified that, the comments are in relation to the Pakistan deploying tactical nuclear
weapons that are easily susceptible for theft and misuse.
USA also further clarified that India USA relations reached a new peak and US is committed to
take forward this relation to a defining partnership of 21st century. So, there is not hyphenation
with Pakistan.
Stand up India
Srilanka China
Srilanka cleared the Colombo port city project for construction by Chinese companies before the
visit of Prime Minister Ranil Wickremesinghe.
China also attaches centrality to Sri Lanka to amplify its maritime silk road.
Indias traditional stand in West Asia is based on a tri axis between Saudi, Iran and Israel. Now, it
appears a shift more towards Saudi Arabia. If India looks its West Asia policy only through the
prism of Pakistan. It might end up making a mistake.
Rise of Sunni extremism is also threatening the conservative Arab monarchies as never
before.
America embrace of Iran and a sense of abandonment exists among Saudis
Steep fall in oil revenues
Indias new approach to the region under Modi is fashioned around three areas.
1. To leverage the Gulf riches to accelerate Indias economic growth
2. To tap in to the huge potential for strengthening counter terror cooperation.
3. To explore the prospects for deepening defense cooperation with the Gulf States.
It has been reported that there are tensions in the Pakistan-Saudi relationship after Islamabads
renewed engagement with Iran. Pakistan had also refused to send troops to Yemen to join a Saudi
war coalition.
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