MUMBAI, Nov 6: Reserve Bank will go for another round of rate cut in its December review, keeping in line with its dovish stance in the last policy, which might be followed by a pause in the medium term, according to foreign brokerage HSBC.
“After the unanimous rate cut call in the MPC and going through minutes of the meeting, we feel the RBI will go for another 25 bps rate cut in the December review. However, we are not expecting for more cuts after December,” HSBC India Chief Economist Pranjul Bhandari told PTI.
She said inflation-inducing factors like house rent allowances arising from the seventh pay commission awards, implementation of Goods and Services Tax and also a likely review of fiscal deficit targets will prevent the RBI from cutting rates further in the near to medium term.
At its maiden rate review, which was also the first review by Governor Urjit Patel, the six-member Monetary Policy Committee (MPC) surprised all by its unanimous rate cut call amid mixed expectations among analysts.
The commentary after the review, coupled with the minutes of MPC meeting released by RBI, has increased expectations of one more round of cut as inflation is expected to go down further but there are differing views on what stance it takes after that.
Bhandari said the rate stance after the December policy hinges a lot on RBI’s internal targets on inflation.
“The crucial question is whether RBI is keen to get all the way to 4 per cent by March 2018 or is it fine as long as inflation is under 6 per cent,” she said.
It can be noted that under Patel’s predecessor Raghuram Rajan, the RBI had said it would be targeting to get inflation down to 4 per cent by March 2018 through a medium-term glide path.
Bhandari said even though the RBI has got it down to 5 per cent levels as of now, it is a “big task” to further reduce it to 4 per cent.
She said to achieve the 4 per cent target, it is essential to work on factors beyond the successfully tamed food inflation and pointed out to price rise on the services front, especially health and education, which are difficult to control.
Both the services components, which constitute nearly 12 per cent of the CPI basket, will require a lot of work from the government side as well, she said.
On growth, consideration for which led to the rate cut stance, Bhandari said it is largely “flat” primarily due to weak investment.
She said unlike the last two fiscals when it helped growth, there has been a decline in public investments which is hurting the overall GDP number, which in the first quarter slipped to 7.1 per cent under the new GDP computation methodology. (AGENCIES)^
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CYBERINSURANCE…
Insurers to hike premium for
cyber security covers
MUMBAI, Nov 6:
Following the data theft that impacted 32 lakh debit cards recently, insurers see surge in demand for cyber insurance and have warned of a spike in cyber risk cover premiums.
In the biggest-ever security breach in the domestic banking sector, over 32 lakh debit cards of various banks were ‘compromised’ after a cyber malware attack in the ATM systems of Yes Bank in May-June.
Following this, several banks including state-run SBI, private sector lenders ICICI Bank, HDFC Bank, Axis Bank and Yes Bank recalled over 32 lakh debit cards since September, while many others blocked those cards which were suspected to have been compromised and asked their customers to change PINs (personal identification numbers) as a precautionary measure.
At present, there are very few non-life insurers who have cyber insurance offerings and some of them include ICICI Lombard, Bajaj Allianz, HDFC Ergo and Tata AIG.
None of the state-run players are into this segment yet.
As per industry estimate, the current market size of liability insurance is Rs 1,800 crore of which cyber insurance could be 5-7 per cent.
“In the light of recent incidents, we have seen a surge in the number of inquiries for these covers and expect to see 10-15 per cent growth in cyber insurance covers sold,” Bajaj Allianz General Insurance chief technical officer (non-motor cover) Sasi Kumar Adidamu said.
But it still has not seen a significant rise in such cover in the domestic market despite the rising cyber threats.
Till date, there may be around 500 active policies in the domestic market, he added.
For Bajaj Allianz GIC, cyber insurance premium varies between 2 and 3 per cent of the total liability premium.
Cyber insurance covers are largely taken by banks, IT & ITeS and e-commerce firms.
Though the product has been in existence globally for a long time, it gained credence in the domestic market about three years back.
However, HDFC Ergo, which launched cyber cover policies earlier this year, saw tremendous response so far and is expecting further jump in demand.
“We have seen around 40 per cent growth in cyber insurance in recent past and given the present scenario in the banking sector, we expect the number to further rise,” HDFC Ergo executive director Mukesh Kumar said, adding, “We are also expecting a reasonable increase in the premium.”
SBI General is also planning to come up with a cyber insurance product.
“We are looking at coming up with a cyber insurance product, keeping in view its increasing demand, particularly after the recent episode of debit card data theft,” said its managing director & chief executive, Pushan Mahapatra. (AGENCIES)
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BOOK-THAROOR…
No sum can compensate for
British cruelties in India: Tharoor
NEW DELHI, Nov 6:
No sum of reparations by the British, who reduced India to one of the poorest countries in the world, can compensate for the “horrendous” crimes the Raj committed against the Indian people, writer and politician Shashi Tharoor has said.
Tharoor, who makes a convincing case against the imperial Empire in his new book “An era of Darkness: The British empire in India”, said the European country became prosperous primarily by impoverishing India.
“The rise of Britain for 200 years was financed by its depredations in India. And certainly, we were a principle cash cow for Britain throughout the nineteenth century. We paid for our own oppression,” Tharoor said at the launch of his book at Taj Mahal hotel here, last week.
“There is and has been a sort of deliberate historical amnesia in Britain about the Raj and about the iniquities of the colonial era. There has been no attempt whatsoever to teach British school children the realities of colonialism.
After all, the beauties of London were built by resources extracted from the colonies,” he said.
The 333-page book published by Aleph Book company is an outcome of the politician’s speech at Oxford last year, in which he demanded reparation for Britain’s colonial crimes.
The book critically examines the 200-year long British legacy in India and provides clinching evidence and incisive arguments against its supposed boons.
Tharoor demolishes the myth of “enlightened despotism” and debunks the “preposterous” vindications given by “Raj apologists” and Anglophiles in favour of the alleged benefits of the rule in India, a country, he writes, was “no primitive or barren land but a glittering jewel of the Medieval world”.
“At the beginning of the 18th century, India’s share of the world economy was 23 per cent, as large as all of Europe put together. By the time the British departed India, it had dropped to just 3 per cent. The reason was simple: India was governed for the benefit of Britain. Britain’s rise for 200 years was financed by its depredations in India,” he writes.
The 60-year-old author asserts that India was “deliberately” deindustrialised and drained of its resources, and left with landlessness and poverty.
“While comparisons of human deaths are always invidious, the 35 million who died of famine and epidemics during the Raj does remind one of 25 million who died in Stalin’s collectivisation drive and political purges, the 45 million who died during Mao’s cultural revolution, and the 55 million who died during World War II,” he states.
He emphasises that Britain’s Industrial Revolution flourished at the expense of crumbling Indian manufacturing industries, “abetted by tariffs and regulatory measures that stacked the decks in favour of the British”.
“It is preposterous to suggest that India’s inability to industralise while the Western world did so was an Indian failure…If India’s GDP went down because it ‘missed the bus’ of industralisation, it was because the British threw Indians under the wheels,” he writes.
Mounting a scathing attack on “benefits” like railways, the English language and the rule of law, Tharoor argues that they were never actually introduced for the benefit of the Indians but to serve Britain’s colonial interests.
He said that it was getting late for Britain to atone for its crimes, and asserted that the UK Prime Minister emulates the example of his Canadian counterpart Justin Trudeau who apologised on behalf of his country for denying permission for the Indian immigrants on the Komagata Maru to land in Vancouver.
“I, for one, dearly hope that a British prime minister will find the heart, and the spirit, to get on his or her knees at Jallianwala Bagh in 2019 and beg forgiveness from Indians in the name of his or her people for the unforgivable massacre that was perpetrated at that site a century earlier,” he remarks.
Tharoor also demands the return of some of the treasure troves looted from India in the course of colonialism.
“The money exacted in taxes and exploitation has already been spent, and cannot realistically be reclaimed. But individual pieces of statuary sitting in British museums could be, if for nothing else than their symbolic value.
“After all if looted Nazi-era art can be (and now is being) returned for their rightful owners in various Western countries, why is the principle any different for looted colonial treasures?” he asks.
Written in a perspicacious style, “An era of Darkness” is an eye-opening volume that goes a long way in correcting many misconceptions about the British Empire in India. (AGENCIES)
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