Policy Rates Likely to Soften
Apropos ‘Why 2017 is Not 201216’ by Chetan Ahya (Aug 1), the recent buoyancy in the stock market is largely due to expectations that the RBI would lower policy rates. But mounting bad loans will hurt the economy, and must be resolved quickly for investment to fructify. Consumption will drive economic growth. The falling CPI post-GST is likely to fuel consumption-driven growth. But the credit risk of banks may dent the growth of EMs, including India. Overall, economic indicators for growth are not moving in tandem, just yet.