According to a report by HSBC, Reserve Bank of India is expected to continue its accommodative stance and can opt for a 25 basis point rate cut.
In the current Budget, government has stuck to the pre- announced fiscal deficit target of 3.5 percent of GDP. Notably, this move is likely to have a far- reaching impact on the macro economy, as per the global financial services major.
The HSBC report, further added that this was not easy for the government, which was trying to do two things together, first to protect the growth and secondly to preserve macro stability. Yet, it bit the bullet and government’s show of fiscal discipline makes it easier for the RBI to continue its accommodative stance.
