Feature
India Inc welcomes RBI move to cut repo rate
Mumbai: India Inc welcomed the reduction in key interest rates by the apex bank Thursday as a pleasant surprise that will uplift investor sentiment in the current sluggish economy.
The much awaited reduction in key interest rates by RBI Governor Raghuram Rajan fulfilled his promise made at the last monetary policy review to cut key lending rates as soon as inflation eases.
The move came a day after wholesale inflation data for December showed it had fallen to 0.11 percent in December 2014 from 6.40 percent in the corresponding month of 2013.
Lauding the RBI’s move, Federation of Indian Chambers of Commerce and Industry’s (FICCI) president Jyotsna Suri pointed out that the cost of finance was an important factor for giving boost to the industrial sector, which has been under stress for a long time now.
“This measure will help in improving the investor sentiment. FICCI hopes that this will be the beginning of further cuts in the policy rate by the central bank, and will enable its transmission into lower lending rates by the banks,” Suri said.
Commenting on the policy announcement made by the RBI to cut 25 basis points (BP) in repo rate, Confederation of Indian Industry (CII) director general Chandrajit Banerjee said the rate cut would propel investment demand, spur spending in rate-sensitive consumer durables and give a fillip to construction activity.
“Going forward, CII hopes that while maintaining a delicate balance between growth and inflation, the RBI would shift its stance in favour of growth, given that the trend in inflation is clearly subdued,” Banerjee said.
The Associated Chambers of Commerce and Industry of India (Assocham) also applauded the RBI decision and observed that the move had correctly assessed the industry’s need.
“The RBI view that any further cut in rate would depend upon further moderation of food inflation and current account deficit is well acknowledged. This move will bring cheer for industry, economy as whole and for the common man,” said Rana Kapoor, Assocham president.
According to the PHD Chamber of Commerce and Industry, the rate cut will play a major role in the revival of industrial activity.
The industry body’s president Alok B. Shriram said industrial activity should be at utmost priority and implementation of recent reform measures to ease doing business in India are expected to re-capture the growth momentum.
Major lenders like ICICI and HDFC Bank too welcomed the ‘out-of-turn’ move by the RBI.
“Together with the various initiatives being taken by the government, the rate cut would strengthen the positive momentum in the economy by lowering borrowing costs as the lower rate regime reflects in bank funding costs over time,” said Chanda Kochhar, managing director and chief executive, ICICI Bank.
“We need to continue to address the issues impeding output and investment in key sectors to leverage this momentum for growth.”
The HDFC Bank said the RBI surprise move has set into motion a much awaited turn in the monetary policy cycle, which was much anticipated.
“The likely trigger for this decision would have been the shallower than anticipated upturn in the CPI inflation reading for December. The continued weakness in pricing power, reflected by the December WPI inflation print would have also added to the pressure on the RBI to act sooner rather than later,” said Jyotinder Kaur, principal economist, HDFC Bank.
The Kotak Mahindra Old Mutual Life Insurance said RBI has re-iterated that once the stance changes, subsequent move will be consistent to the direction.
“We believe RBI will ease further by 25 BP by March 2015. RBI also has data on inflation expectations survey which confirms the drop to single-digit future inflation expectations,” said Kunal Shah, fund manager, debt at Kotak Mahindra Old Mutual Life Insurance.
“We believe that if global commodity prices remain soft and fiscal consolidation continues, RBI can cut rates by another 50-75 BP from the current level in calendar year 2015.
The State Scores Extra High on Gaming-Friendly Industry Index
Meghalaya scored 92.85 out of 100 possible points in a Gaming Industry Index and proved to be India’s most gaming-friendly state following its recent profound legislation changes over the field allowing land-based and online gaming, including games of chance, under a licensing regime.
The index by the UK India Business Council (UKIBC) uses a scale of 0 to 100 to measure the level of legalisation on gambling and betting achieved by a state based on the scores over a set of seven different games – lottery, horse racing, betting on sports, poker, rummy, casino and fantasy sports
Starting from February last year, Meghalaya became the third state in India’s northeast to legalise gambling and betting after Sikkim and Nagaland. After consultations with the UKIBC, the state proceeded with the adoption of the Meghalaya Regulation of Gaming Act, 2021 and the nullification of the Meghalaya Prevention of Gambling Act, 1970. Subsequently in December, the Meghalaya Regulation of Gaming Rules, 2021 were notified and came into force.
All for the Tourists
The move to legalise and license various forms of offline and online betting and gambling in Meghalaya is aimed at boosting tourism and creating jobs, and altogether raising taxation revenues for the northeastern state. At the same time, the opportunities to bet and gamble legally will be reserved only for tourists and visitors.
“We came out with a Gaming Act and subsequently framed the Regulation of Gaming Rules, 2021. The government will accordingly issue licenses to operate games of skill and chance, both online and offline,” said James P. K. Sangma, Meghalaya State Law and Taxation Minister speaking in the capital city of Shillong. “But the legalized gambling and gaming will only be for tourists and not residents of Meghalaya,” he continued.
To be allowed to play, tourists and people visiting the state for work or business purposes will have to prove their non-resident status by presenting appropriate documents, in a process similar to a bank KYC (Know Your Customer) procedure.
Meghalaya Reaches Out to a Vast Market
With 140 millions of people in India estimated to bet regularly on sports, and a total of 370 million desi bettors around prominent sporting events, as per data from one of the latest reports by Esse N Videri, Meghalaya is set to reach out and take a piece of a vast market.
Estimates on the financial value of India’s sports betting market, combined across all types of offline channels and online sports and cricket predictions and betting platforms, speak about amounts between $130 and $150 billion (roughly between ₹9.7 and ₹11.5 lakh crore).
Andhra Pradesh, Telangana and Delhi are shown to deliver the highest number of bettors and Meghalaya can count on substantial tourists flow from their betting circles. The sports betting communities of Karnataka, Maharashtra, Uttar Pradesh and Haryana are also not to be underestimated.
Among the sports, cricket is most popular, registering 68 percent of the total bet count analyzed by Esse N Videri. Football takes second position with 11 percent of the bets, followed by betting on FIFA at 7 percent and on eCricket at 5 percent. The last position in the Top 5 of popular sports for betting in India is taken by tennis with 3 percent of the bet count.
Local Citizens will Still have Their Teer Betting
Meghalaya residents will still be permitted to participate in teer betting over arrow-shooting results. Teer is a traditional method of gambling, somewhat similar to a lottery draw, and held under the rules of the Meghalaya Regulation of the Game of Arrow Shooting and the Sale of Teer Tickets Act, 2018.
Teer includes bettors wagering on the number of arrows that reach the target which is placed about 50 meters away from a team of 20 archers positioned in a semicircle.
The archers shoot volleys of arrows at the target for ten minutes, and players place their bets choosing a number between 0 and 99 trying to guess the last two digits of the number of arrows that successfully pierce the target.
If, for example, the number of hits is 256, anyone who has bet on 56 wins an amount eight times bigger than their wager.
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