RBI August 2024 MPC Meeting: In his monetary policy review address, Reserve Bank of India (RBI) Governor Shaktikanta Das announced a significant increase in the tax payment limit through the unified payments interface (UPI), raising it to Rs 5 lakh from the previous Rs 1 lakh.


In addition, the governor unveiled measures to expedite cheque payments, benefiting both payers and payees. Currently, cheque clearing through the Cheque Truncation System (CTS) operates in a batch-processing mode with a clearing cycle of up to two working days. Das proposed reducing this cycle by introducing continuous clearing with 'on-realisation-settlement' in CTS, which will enable cheque clearance within a few hours on the day of presentation.


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Governor Das also introduced 'Delegated Payments' through UPI, a new facility allowing a primary user to authorise a secondary user to make UPI transactions from the primary user's bank account without requiring the secondary user to have a separate bank account linked to UPI. This initiative is expected to further deepen the reach and usage of digital payments.


The six-member Monetary Policy Committee (MPC) of the RBI has kept the repo rate unchanged at 6.5 per cent, maintaining a focus on the withdrawal of accommodation stance by a majority of 4:2. Other rates, including the Standing Deposit Facility (SDF), Marginal Standing Facility (MSF), and the Bank Rate, also remain unchanged in the MPC review.


Governor Das highlighted that domestic economic activities continue to remain resilient and projected real GDP growth at 7.2 per cent for the fiscal year 2024-25.


The RBI has revised its CPI inflation forecast for Q2FY25 to 4.4 per cent, up from the previous estimate of 3.8 per cent. For Q3FY25, the forecast has been slightly adjusted to 4.7 per cent from 4.6 per cent, while the Q4FY25 forecast has been lowered to 4.3 per cent from 4.5 per cent. The projection for Q1FY26 CPI inflation stands at 4.4 per cent.


The GDP growth target for Q1FY25 has been revised to 7.1 per cent from the earlier estimate of 7.3 per cent. Overall, the FY25 real GDP growth projection remains unchanged at 7.2 per cent.