Yogi model worried RBI Chief,why?

Kshitiz Kant and Suchit Bajpai

Starting the credit policy of new financial year, RBI Governer, Urjit Patel by not doing any change in Repo Rate has clarified that the running Credit Policy is not for the interest rate.

Urjit Patel has introduced about 5 big standing Economic challenges through his Credit Policy.

Among these challenges, most important one is Farmers’ Loan Model that has been forwarded by UP CM Yogi Adityanath -- RBI says it’s a very tough challenge.

The loan waive plan of UP Government will merely provide the relief for short term to the farmers who burdened in the problem from, but it will promote the bad tradition of loaning and will affect of state's finances policy.

The loans up to Rs 100000 have been waived to the 2.15 crore of small and marginal farmers by the UP BJP government.

This will burden of Rs 307.29 billion over the state’s finances. Moreover of this, the government has put 7 lakh farmers' debt Rs 56.30 billion into the account of non-executed assets.

RBI, introducing the first monetary policy review, said the proposed 8-24% house rent allowance in the 7th pay commission will affect the consumer price index (dearness).

RBI has estimated that the acceptance of allowance on proposed rates by the pay commission in the beginning of running financial year will be followed by the most states to their government servants, which may enhance more in dearness from 1 - 1.5 percent during the financial year.

RBI has expressed its fear in its monetary review that El-nino impact appears of endangering the climate this year, which is expected to be weak monsoon.

Many years' loss in kharif crop had resulted into gain during a good monsoon of year 2016, but the prediction of weak monsoon by the weather department has been a big challenge before RBI.

The prices of crude oil in international market from the past 3 years were running at its lowest level. This impact controlled the fiscal deficit of  country, which affected the treasure of union government; but the crude oil has again cross the rate 50 dollar per barrel  in the wake of the OPEK countries agreement during the past a few months.

RBI assumes that the crude oil price rise in next few months may cross 60 dollar per barrel -- dearness impact will surface clearly.

Donald trump has given a new challenge before the countries of world by giving his speech slogan ‘America First’.

America was leading free trade and globalisation so far; and many countries economic policies were the dependents of America’s policy.

RBI’s monetary review estimates that the adverse effect of D trump’s policies over Indian economy may create grave challenge.