Business
RBI likely to increase repo rate by 50 basis points to 5.9% in Sep policy: Morgan Stanley

The Monetary Policy Committee in the September credit policy is likely to increase the repo rate by 50 basis points to 5.90 per cent and will keep stance unchanged, according to a report by Morgan Stanley.
“We were earlier expecting a 35bp increase,however, sticky inflation and continued hawkish stance of DM central banks, warrants continued front loading of rate hikes, in our view,” the report said.
The inflation which is ranging above the upper tolerance band of the Reserve Bank of India (RBI) for the eighth straight and therefore Morgan Stanley too expect inflation to remain sticky around 7.1-7.4 per cent in September as well, driven by increases in food prices as per high frequency food price trend.
Thereafter, we expect the trend to moderate but remain above 6 per cent until January/Februaru 2023. Risks to the inflation outlook are skewed to the upside due to uncertainty around food inflation trajectory (sowing for rice, pulses is lower YoY), changes in global commodity prices and possibility of imported inflation if exchange rate weakens amid dollar strength, the report added.
Going forward, the key to track in the policy will be: (a) changes to growth or inflation forecast. While incoming inflation data is along expected lines,growth for QE Jun was a tad below our expectations (even RBI’s projections), (b) comments around comfort on external balance sheet in the context of external risks and (c) overall tone of the policy statement and path on real rate normalization.
The RBI has lifted the repo rate by 140 basis points and surplus liquidity has fallen significantly (now $19.1 billion from $89 billion in January 2022), pushing the weighted average call rate to 5 per cent from 3.5 per cent in April.
However, the normalization in real rates has been less stark, with real policy rates at -1.6 per cent currently vs. -3.8 per cent in April. The external environment remains challenging, with generally higher commodity prices vs. pre-pandemic, stronger dollar and continued hawkish response from DM central banks. While domestic macro fundamentals are strong, risks from continued elevated commodity prices need to be tracked.
Against this backdrop, we expect monetary policy normalization to continue, pegging the terminal repo rate at 6.5 per cent by February 2023. Risks seem skewed to the upside for the terminal repo rate driven by external factors, which could potentially keep inflation higher for longer.
Business
Indian equity indices decline sharply over US tariff concerns

Mumbai, Aug 28 : The Indian equity indices fell sharply to end the session nearly one per cent lower on Thursday — a day after the 50 per cent US tariffs on Indian goods came into effect.
Sensex ended the session at 80,080.57, down 705 points or 0.87 per cent. The 30-share index started the session in negative territory at 80,754 against last session’s closing of 80,786.54 amid selling across the sectors. The Index further extended the losing momentum to hit an intra-day low at 80,013.02 following the implementation of US tariffs on Indian goods.
Nifty settled at 24,500.90, down 211.15 points or 0.85 per cent.
“Domestic equities ended lower as pessimism took hold following the implementation of tariffs on Indian goods, dampening investor sentiments. While the cotton import duty exemption briefly lifted hopes of policy support to counter tariff impacts, triggering a short-lived intraday recovery, investor mood remained fragile, with large caps declining and mid and small caps underperforming amid risk-off sentiment,” said Vinod Nair, Head of Research, Geojit Investments Limited.
Most sectors, including Auto, IT, FMCG, and Metals, traded in the red as investors turned to profit-booking from recent gains, while consumer durables outperformed, likely supported by GST rationalisation and expectations of festive demand, Nair added.
HCL Tech, TCS, Power Grid, Infosys, Hindustan Unilever, HDFC Bank, ICICI Bank, Bharati Airtel, Mahindra and Mahindra, Trent, Tata Motors, Sun Pharma, NTPC, BEL, Eternal and SBI were the top losers from the Sensex pack. While Titan, L&T, Maruti Suzuki, and Axis Bank were top gainers.
The majority of sectoral indices settled in negative territory amid selling pressure. Nifty Fin Services dropped 312.30 points or 1.20 per cent, Nifty Bank fell 630.10 points or 1.16 per cent, Nifty Auto declined 136.80 points or 0.54 per cent, Nifty FMCG closed 574.05 points or 1.02 per cent, and Nifty IT slipped 574.45 points or 1.59 per cent.
Broader indices followed suit as well. Nifty Small Cap 100 dipped 254.25 points or 1.45 per cent, Nifty Midcap 100 fell 718.70 per cent or 1.45 per cent, and Nifty 100 closed 235 points or 0.93 per cent lower.
Rupee traded weakly as selling pressure in capital markets deepened, with FII flows continuing to remain negative amid persistent concerns on India’s growth outlook and fiscal deficit.
“The imposition of a 50 per cent US tariff has raised uncertainty over exports, weighing on overall sentiment, until there is clarity on alternatives either through negotiations with the US or by striking trade agreements with other nations — investors are likely to stay cautious,” said Jateen Trivedi of LKP Securities.
The rupee is expected to remain under pressure with a near-term range of 87.25–88.25, he added.
Business
No user fee collection from two-wheelers at toll plazas: Govt

New Delhi, Aug 21: The government on Thursday clarified that no user fee is levied from two-wheelers at the toll plazas on National Highways and National Expressways across the country.
The clarification came after reports surfaced that the National Highways Authority of India (NHAI) would collect user fees from two-wheeler riders at toll plazas.
“In reference to the fake news circulating on social media regarding toll collection from two wheelers on toll plaza, NHAI would like to clarify that no user fee is levied from two wheelers at the Toll plazas on National Highways and National Expressways across the country,” the Ministry of Road Transport and Highways said in a statement.
User fee on National Highways is collected as per the National Highway Fee (Determination of Rates and Collection) Rules, 2008, and there is no proposal to charge toll fee from the two wheelers, the ministry added.
According to the rules, the user fee at toll plazas is charged from four or more wheeled vehicles which include categories like car, jeep, van or light motor vehicle/light commercial vehicle, light goods vehicle or mini bus/bus or truck/heavy construction machinery (HCM) or earth moving equipment (EME) or multi axle vehicle (MAV) (three to six axles)/ oversized vehicles (seven or more axles.
Meanwhile, the NHAI sold over 5 lakh FASTag-based annual toll permits in just four days, collecting Rs 150 crore in revenue. Tamil Nadu recorded the highest number of purchases of annual passes in four days, followed by Karnataka and Haryana.
Further, Tamil Nadu, Karnataka, and Andhra Pradesh recorded the highest number of transactions through FASTag annual passes at toll plazas, a statement by NHAI said. Private vehicles can now use an annual toll pass for free passage through toll plazas on national highways and expressways, with each pass priced at Rs 3,000.
The annual pass is valid for one year from activation or for 200 toll trips, whichever occurs first.
Business
India To Clock 6.7% Growth Outpacing RBI Monetary Policy Committee’s 6.5% Recent Forecast

New Delhi: India is expected to clock 6.7 per cent growth in the first quarter of the current fiscal (FY26), outpacing the RBI Monetary Policy Committee’s (MPC’s) recent forecast of 6.5 per cent, credit rating agency ICRA said on Tuesday.The rating agency report projects the growth in the gross value added (GVA) to stand at 6.4 per cent in Q1 FY2026.
Improved transmission of monetary easing and the recent announcement of forthcoming GST rationalisation may help to shore up urban consumption sentiments ahead of the festive season, the report said.”ICRA estimates a double-digit growth in net indirect taxes (in nominal terms), aided by the sharp uptick in the government of India’s indirect taxes (+11.3 per cent in Q1 FY26 from -3.1 per cent in Q4 FY2025), despite the narrower contraction in its subsidy outgo,” said Aditi Nayar, Chief Economist, Head-Research and Outreach, ICRA.
“Benefitting from robust government capital as well as revenue spending, upfronted exports to some geographies and nascent signals of improved consumption, the pace of expansion in economic activity in Q1 FY2026 is estimated at 6.7 per cent,” Aditi Nayar said.The rating agency estimates the YoY growth in the services GVA to increase to an eight-quarter high of 8.3 per cent in Q1 FY26, from 7.3 per cent in Q4 FY25, supporting the overall GVA expansion in that quarter.
In particular, the combined non-interest revenue expenditure of 24 state governments reported a double-digit YoY growth of 10.7 per cent in Q1 FY26, up from 7.2 per cent in Q4 FY25.Likewise, the Central government’s non-interest revenue expenditure saw a turnaround, recording a YoY growth of 6.9 per cent against a contraction of 6.1 per cent in the previous quarter, said the report.
Rural sentiments, as reflected in the Current Situation Index (CSI) improved further in the July 2025 (100.6) round of the RBI’s Rural Consumer Confidence Survey, reflecting favourable trends in farm output in the last two cropping seasons, and the upbeat outlook for the ongoing kharif season, and a considerable cooling in the rural CPI inflation.
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