The fifth bi-monthly Monitory-Policy review by RBI yesterday did not change any key rates. But that's not the interesting point here. RBI Governor stated the following, as related to 7CPC recommendations .
Pay Commissions proposals impact ; Outgo likely to be offset by budgetory tightening.
On the 7CPC, in the broad sense, there is going to be additional expenditure but it will be offset , presumably, by either additional revenue raising or cuts elsewhere so that the fiscal consolidation path is maintained. so, in that sense, we don't feel there will be a significant effect on aggregate demand provided , ofcourse, you maintain the fiscal path. ..... And I think the Govt has taken a number of these factors into account while anticipating the consequences of the Pay Commission proposals.
The message : 7CPC implementation is not a problem. Heavens are not going to fall if 7CPC recommendations are implemented.
Pay Commissions proposals impact ; Outgo likely to be offset by budgetory tightening.
On the 7CPC, in the broad sense, there is going to be additional expenditure but it will be offset , presumably, by either additional revenue raising or cuts elsewhere so that the fiscal consolidation path is maintained. so, in that sense, we don't feel there will be a significant effect on aggregate demand provided , ofcourse, you maintain the fiscal path. ..... And I think the Govt has taken a number of these factors into account while anticipating the consequences of the Pay Commission proposals.
The message : 7CPC implementation is not a problem. Heavens are not going to fall if 7CPC recommendations are implemented.
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