Current Affairs India

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RBI Raises Policy Rates by 50 Basis Points

Home, auto and other loans are set to become costlier with the Reserve Bank today hiking key short-term rates to contain inflation, while giving relief to small savers by increasing the savings bank rate to 4 per cent from 3.5 per cent now.

The signal was given by the RBI in its annual policy review meeting for 2011-12, where it hiked the repo rate (the rate at which banks borrow from the RBI) by 50 basis points to 7.25 per cent, the ninth increase since March, 2010.

RBI Governor D Subbarao made it clear that containing inflation would take precedence over growth, which has been pegged at a lower level of 8 per cent for 2011-12 as against the government’s projection of 9 per cent.

The move to hike the rates has been necessitated as the RBI feels inflation would remain at an “elevated level” of 9 per cent in the first half of the current financial year before moderating to 6 per cent by March, 2012.

Joshi Reappointed PAC Chairperson

Veteran BJP leader Murli Manohar Joshi, who is at the centre of a controversy over the draft report on 2G scam, was renominated as the chairman of Parliament’s Public Accounts Committee, notwithstanding the raging row.

Joshi was again nominated by his party following which Lok Sabha Speaker Meira Kumar has reappointed him as chairman of PAC which is responsible for conducting the financial audit of various departments and ministries.

Pension Bill introduced in Parliament

Paving the way for setting up of a regulator for the insurance sector, the Union government, on March 24, 2011, introduced the long-awaited Pension Fund Regulatory and Development Authority (PFRDA) Bill in the Lok Sabha. The move aims at providing social security to millions of employees through efficient intermediation of long-term household savings.

The proposed legislation, however, steered clear of making any mention of a ceiling on foreign direct investment (FDI) in the sector. The government will separately notify the ceiling.

The Bill also allows for part investment in stock markets although Left leaders are against equity investment option given to pension scheme.

Census 2011: Population pegged at 1.21 billion

India’s most backward and populous States slowed down their rate of population growth, helping the country register its sharpest decline in population growth since Independence. India’s population grew to 1.21 billion, according to provisional results of the decadal headcount declared by Census Commissioner C. Chandramouli on March 30, 2011.