Documenti di Didattica
Documenti di Professioni
Documenti di Cultura
a) Agriculture
b) Micro and Small Enterprises
c) Weaker Sections
d) All of the above
where speculative
investment is leading to
demand-side inflation
Selective Credit
e.g. real-estate &
Control / PSL
housing.
- ↑loan-flow to sectors
where loans can ↑supply
e.g. onion farmers.
- Repo is not major source of funds for banks, unlike the Advanced Economies, where
households don’t save that much in Banks.
- Indian Banks don’t immediately pass on the rate cuts to customers, citing NPA problems.
- Supply side issues: El-Nino/Poor monsoon hurting crop production, geopolitical issues
increasing global crude oil & raw material prices.
- Government side issues: Fiscal repression, Fiscal slippage, Fiscal deficit, Subsidy
leakage, Populist Loan-waivers etc.
- Structural Issues in Economy: lack of electricity-road infrastructure, Ease of Doing Biz,
Presence of Informal moneylenders in rural areas who circulate black money at
exorbitant interest rates. Poor penetration of banking sector and financial inclusion etc.
Because of these reasons, RBI can’t greatly reduce the Repo/CRR/SLR, and then its
criticised for not making cheap loans available to industries.