With GDP growth slowing to 4.5 per cent in the third quarter and Finance Minister P Chidambaram pegging fiscal deficit at 4.8 per cent of GDP in 2013-14, after 5.2 per cent this year, the Street expects RBI to cut repo rate 50 bps, in two tranches, before the end of the first half of 2013-14 -- the first, of 25 bps, on March 19.
An easing inflation was another factor likely to comfort RBI, market participants said.
“Though the budgeted revenue assumptions for next year appear ambitious, the government seems serious about fiscal consolidation.
"With growth below trend and pricing power weak, this should clear the decks for a March rate cut,” said JPMorgan India Economist Sajjid Chinoy.
In the current financial year, RBI has cut repo rate by 75 basis points in two tranches.
The first reduction, of 50 basis points, was effected in April, before a 25-bp one in January.
The repo rate currently stands at 7.75 per cent.
The Wholesale Price Index-based inflation eased to a three-year low of 6.62 per cent in January, from 7.23 per cent in the same month last year.
The Economic Survey exuded confidence the WPI-based inflation would ease to 6.2-6.6 per cent in March, on the back of falling prices in the non-food
Muslims won't mind if Modi is elected PM: Ex-Darul chief
Markets open marginally lower
Vijay Mallya's luxury toys are not his own
Photos: The hurt is over at last for Nadal
Car LAUNCHES: 8 FANTASTIC models in the next 2 mths