Hindi English Translation || Editorial || ​Same page: on monetary policy, the RBI, the Government

​Same page: on monetary policy, the RBI, the Government

The RBI and the government are now aligned on boosting growth

The Reserve Bank of India (RBI) Monetary Policy (monetary policy refers to the use of monetary instruments under the control of the central bank to regulate magnitudes such as interest rates, money supply, and availability of credit with a view to achieving the ultimate objective of economic policy mentioned in the Reserve Bank of India Act, 1934) Committee’s decisions, on Friday, show that the central bank (केंद्रीय बैंक) is now unequivocally (स्पष्ट रूप से) choosing growth in the perennial (continuing, unending, never-ending, endless, ceaseless, lasting, everlasting, persisting, perpetual, constant, continual, unchanging, never-changing) growth-inflation trade-off (a situation in which you must choose between (balance) two things that are opposite or cannot be had at the same time; a compromise; swap, exchange). This is the correct approach at this time. The first major decision was to cut the repo rate (रेपो दर) by 50 basis points (आधार बिंदु) to 5.5%. It comes on the back of (as a result of, because of) two cuts of 25 basis points each, in February and April. With the latest retail inflation (मुद्रास्फीति, महंगाई) coming in at a 69-month low, and generally exhibiting a subdued (restrained, controlled, toned down, muted) trend, price stability (मूल्य स्थिरता) has now been relegated (downgrade, lower, assign a less important position to) as a secondary concern. These rate cuts will, once the banks transmit them to borrowers, make it cheaper for companies and consumers to borrow to invest and purchase. The second major decision, of slashing (भारी कटौती करना, घटाना) the cash reserve ratio (नकद आरक्षित अनुपात) by 100 basis points, will help with the transmission of the rate cuts (a decision by a central bank (like RBI in India) to reduce its main interest rate to the banks (like SBI, ICICI & etc in India) when these commercial banks get money from the central bank. Once this rate goes down, the banks are in a position to give loans at lower interest rates to individuals and the industry). The less that banks have to keep with themselves, as stipulated (निर्धारित) by the cash reserve ratio, the more they can lend out (उधार देना) — and now at lower rates. It is worth noting, however, that the central bank has again changed its stance (position, standpoint, point of view, opinion, approach, perspective). In April, it had moved from being neutral to being accommodative (अनुकूल, सहायक), indicating that it was inclined (इच्छुक होना, तैयार होना) to cut rates further. It has now moved back to neutral (तटस्थ), meaning more rate cuts in the short term are unlikely (असंभाव्य), unless growth falls well short of expectations (projection, prediction, indication, forecast, prognosis, speculation, calculation (of future events or trends)). This is a sensible stance to take, given (considering, taking into account, bearing in mind) the vast uncertainties (unpredictability, unreliability, riskiness/precariousness) that the Indian and global economies are facing. The neutral stance also means that the RBI is equally predisposed (liable to, subject to, inclined to) to raise rates again in the event of (if something happens) an unforeseen (unpredicted, unexpected, unanticipated) and sustained (continuous, continued, endless, persistent, ongoing) spike (sudden increase/rise) in prices. The monsoon is yet to fully play out (occur, happen, take place), after all.

The timing of these decisions is sound (convincing, solid, logical, reasonable; intact, strong, substantial). Inflation is low and not likely (to be expected, anticipated, predictable, foreseeable, on the cards, in the wind) to jump (increase, rise, go up, surge, soar) any time soon (in the near future) if current factors remain unchanged. Further, there are no major elections now that would otherwise have necessitated (require, demand, ask for, need, call for, entail, warrant) a pre-emptive (preventive, precautionary, protective, defensive) strong grip (control) on price levels. On the other hand (on the contrary, In contrast, on the flip side, in opposition, conversely, contradictorily alternatively), growth is lower than it could be. The RBI has projected (predict, indicate, forecast, prognose, speculate, calculate (future events or trends)) growth in the current financial year 2025-26 to be 6.5%, which is no faster than what the government provisionally (tentatively, temporarily, for the time being) estimated for the previous year. Fiscal policy (in simple terms, it is an estimate of taxation and government spending that impacts the economy) in terms of (with regard to, with reference to, regarding, concerning, as to, in connection with) government spending has reached the limit of the stimulus (impetus, boost, incentive, fillip) it can provide. After a decade (a period of ten years) of increasing outlays (expenditure, expenses, spending, outgoings, money spent), government capital expenditure can at best (only, simply, but, nothing but) be maintained at the level it is at, but cannot reasonably (in a sensible way) be expected to grow much further. Finance Minister Nirmala Sitharaman and officials (officer, functionary, office-holder; authority, public/government servant, office-bearer, civil servant, mandarin) in the Ministry of Finance have indicated as much (the same). Apart from developmental and social priorities, the government now has additional defence spending to account for (constitute, make up, comprise, form). Monetary policy has to step up (increase, intensify, consolidate, augment, strengthen, accelerate, escalate) and boost growth, and it is good to see the RBI and the government on the same page (having a shared understanding or agreement on a particular subject; in agreement).

Courtesy: The Hindu

Important Word List With Meaning

1.the monetary policy committee (MPC) (noun)

Hindi Meaning - मौद्रिक नीति समिति
English Meaning - it is a six-member panel that is expected to bring “value and transparency” to rate-setting decisions. It will feature three members from the RBI — the Governor, a Deputy Governor and another official — and three independent members to be selected by the Government. The MPC will meet four times a year to decide on monetary policy by a majority vote.

2.central bank (noun)

Hindi Meaning - केंद्रीय बैंक
English Meaning - the banking regulator of a county’s banking system. (e.g. The Reserve Bank of India (RBI) is the central bank of India).

3.unequivocally (adverb)

Hindi Meaning - स्पष्ट रूप से
English Meaning - absolutely, directly, clearly, obviously, explicitly, definitely, conclusively, unquestionably, unconditionally, categorically, unambiguously, unqualifiedly, outright.

4.inflation (noun)

Hindi Meaning - मुद्रास्फीति, महंगाई
English Meaning - simply meaning “cost of living”; increase of price level of goods & services and vice versa decrease of currency value.

5.repo rate (noun)

Hindi Meaning - रेपो दर
English Meaning - it is the rate at which the central bank of a country (RBI in case of India) lends money to commercial banks in the event of any shortfall of funds.

6.basis point (BPS) (noun)

Hindi Meaning - आधार बिंदु
English Meaning - a unit of measure used in finance to describe the percentage change in the value or rate of a financial instrument. One basis point is equivalent to 0.01% (1/100th of a percent). Used for measuring change in interest rate/yield.

7.unlikely (adjective)

Hindi Meaning - असंभाव्य
English Meaning - not likely, doubtful, improbable, questionable, debatable.

8.price stability (noun)

Hindi Meaning - मूल्य स्थिरता
English Meaning - no (drastic) change in the price of goods and services in an economy over a period of time. It implies avoiding both prolonged inflation and deflation.

9.slash (verb)

Hindi Meaning - भारी कटौती करना, घटाना
English Meaning - cut, reduce, lower greatly.

10.cash reserve ratio (CRR) (noun)

Hindi Meaning - नकद आरक्षित अनुपात
English Meaning - a certain minimum amount of deposit that the commercial banks have to hold as reserves with the central bank. The proportion of liabilities which a bank has to set aside as cash.

11.stipulated (adjective)

Hindi Meaning - निर्धारित
English Meaning - prescribed, fixed, specified, defined, required.

12.lend out (phrasal verb)

Hindi Meaning - उधार देना
English Meaning - give, provide, grant.

13.neutral (adjective)

Hindi Meaning - तटस्थ
English Meaning -ordinary, safe, uncommitted, uninvolved, non-participating; even-handed, indifferent.

14.accommodative (adjective)

Hindi Meaning - अनुकूल, सहायक
English Meaning - aimed to encourage economic activity by reducing interest rates. ​

15.incline (verb)

Hindi Meaning - इच्छुक होना, तैयार होना
English Meaning - be willing, be ready, be prepared.

16.subdued (adjective)

English Meaning - restrained, controlled, toned down, muted.

17.reverse repo rate (noun)

English Meaning - it is the rate at which the central bank of a country (RBI in case of India) borrows money from commercial banks within the country.

18.same page (noun)

English Meaning - shared understanding/agreement.

19.monetary policy (noun)

English Meaning - monetary policy refers to the use of monetary instruments under the control of the central bank to regulate magnitudes such as interest rates, money supply, and availability of credit with a view to achieving the ultimate objective of economic policy mentioned in the Reserve Bank of India Act, 1934.

20.align (verb)

English Meaning - join, unite, combine; team up, cooperate, collaborate.

21.perennial (adjective)

English Meaning - continuing, unending, never-ending, endless, ceaseless, lasting, everlasting, persisting, perpetual, constant, continual, unchanging, never-changing

22.trade-off (noun)

English Meaning - a situation in which you must choose between (balance) two things that are opposite or cannot be had at the same time; a compromise; swap, exchange.

23.growth-inflation trade-off (noun)

English Meaning - the challenge of sustaining a high growth rate along with the need for curbing inflation which is at an all time high.

24.on the back of (phrase)

English Meaning - as a result of, because of.

25.retail or consumer price index (CPI) inflation (noun)

English Meaning - The change in the price index of the basket of consumer goods and services over a period of time is referred to as CPI-based inflation or retail inflation.

26.wholesale or wholesale price Index (WPI) inflation (noun)

English Meaning - The change in the price index of the basket of wholesale goods (and no services) over a period of time is referred to as WPI-based inflation or wholesale inflation.

27.come in at (phrasal verb)

English Meaning - to be at a particular level/amount.

28.relegate (verb)

English Meaning - downgrade, lower, assign a less important position to.

29.rate cut (noun)

English Meaning - a decision by a central bank (like RBI in India) to reduce its main interest rate to the banks (like SBI, ICICI & etc in India) when these commercial banks get money from the central bank. Once this rate goes down, the banks are in a position to give loans at lower interest rates to individuals and the industry.

30.stance (noun)

English Meaning - position, standpoint, point of view, opinion, approach, perspective.

31.fall short of (phrase)

English Meaning - fail to meet/reach; be deficient/inadequate/insufficient.

32.expectation (noun)

English Meaning - projection, prediction, indication, forecast, prognosis, speculation, calculation (of future events or trends).

33.given (preposition)

English Meaning - considering, taking into account, bearing in mind.

34.uncertainty (noun)

English Meaning - unpredictability, unreliability, riskiness/precariousness.

35.predisposed (adjective)

English Meaning - liable to, subject to, inclined to.

36.in the event of (phrase)

English Meaning - if something happens.

37.unforeseen (adjective)

English Meaning - unpredicted, unexpected, unanticipated.

38.sustained (adjective)

English Meaning - continuous, continued, endless, persistent, ongoing.

39.spike (noun)

English Meaning - sudden increase/rise.

40.play out (phrasal verb)

English Meaning - occur, happen, take place.

41.after all (phrase)

English Meaning - basically, more importantly, ultimately

42.sound (adjective)

English Meaning - convincing, solid, logical, reasonable; intact, strong, substantial.

43.likely (adverb)

English Meaning - probably, presumably, potentially, doubtlessly.

44.likely (adjective)

English Meaning - to be expected, anticipated, predictable, foreseeable, on the cards, in the wind.

45.jump (verb)

English Meaning - increase, rise, go up, surge, soar.

46.any time soon (phrase)

English Meaning - in the near future.

47.necessitate (verb)

English Meaning - require, demand, ask for, need, call for, entail, warrant.

48.pre-emptive (adjective)

English Meaning - preventive, precautionary, protective, defensive.

49.grip (noun)

English Meaning - control.

50.on the other hand (phrase)

English Meaning - on the contrary, In contrast, on the flip side, in opposition, conversely, contradictorily alternatively.

51.project (verb)

English Meaning - predict, indicate, forecast, prognose, speculate, calculate (future events or trends).

52.provisionally (adverb)

English Meaning - tentatively, temporarily, for the time being.

53.fiscal policy (noun)

English Meaning - in simple terms, it is an estimate of taxation and government spending that impacts the economy.

54.in terms of (phrase)

English Meaning - with regard to, with reference to, regarding, concerning, as to, in connection with.

55.stimulus (noun)

English Meaning - impetus, boost, incentive, fillip.

56.decade (noun)

English Meaning - a period of ten years.

57.outlay (noun)

English Meaning - expenditure, expenses, spending, outgoings, money spent.

58.capital spending/capital expenditure (CAPEX) (noun)

English Meaning - the money spent on the acquisition of assets like land, buildings, machinery, equipment, as well as investment in shares.

59.public capex (noun)

English Meaning - government capital expenditure.

60.at best (phrase)

English Meaning - only, simply, but, nothing but.

61.reasonably (adverb)

English Meaning - in a sensible way.

62.official (noun)

English Meaning - officer, functionary, office-holder; authority, public/government servant, office-bearer, civil servant, mandarin.

63.as much (phrase)

English Meaning - the same.

64.account for (phrasal verb)

English Meaning - constitute, make up, comprise, form.

65.step up (phrasal verb)

English Meaning - increase, intensify, consolidate, augment, strengthen, accelerate, escalate.

66.on the same page (phrase)

English Meaning - having a shared understanding or agreement on a particular subject; in agreement.