Surprising almost nobody, the Monetary Policy Committee said on Wednesday they would cut interest rates once again. However, when the number 35 bps popped up on news channels, everybody went berserk…….
Meet me in the middle
Flipping the narrative completely and stepping into the spotlight, RBI governor Shaktikanta Das and the Monetary Policy Committee did something very few people expected. A 35 bps (read 0.35%) cut in interest rates.
Sources also said that shortly afterwards Shaktikanta Das and other members of the Monetary Policy Committee were seen holding hands and singing Govinda’s classic — “ Main chahe ye Karu, Main chahe wo karu,… meri marzi” in the lobby. However, these reports still remain unconfirmed….
Okay, we are kidding 😂
But the point is — a 35 bps cut seemed quite strange. Until that is, you start reading between the lines.
For starters, it’s possible that the RBI didn't fully want to give in to the majority demand (read Corporate India's demand) of a 50 bps cut. But then, they didn’t want to tell the corporates to go screw themselves either. So maybe, this is the RBI walking the tightrope here.
Or could this be about leverage ?🤔
Come next policy meet if the economy continues to be in the slump despite a 50 bps cut, the RBI doesn’t want to be in a position where it throws its arms up in the air and screams “We are f*ked guys, Can’t do nothing no more”. Ideally, the RBI would prefer enough wiggle room to squeeze in another rate cut if the need were to arise.
For our sake and our children’ sake, let’s hope that such a day never arrives. For if there is another rate cut in the near horizon it will most likely be out of desperation than a well-calibrated move to spur growth. 🙏
Flipkart to launch a new streaming service
Flipkart has thrown its hat into the mix by announcing its own streaming service
The new service will license and host content from both Walt Disney and Balaji Telefilms (read Ekta Kapoor) and will remain free-to-use for current members of the fabled Flipkart Plus Loyalty program.
Yeah, we haven’t heard of it either. But I think that’s the point 😮
There aren't enough people who know about the Loyalty program and Flipkart wants to change that. Let us explain.
The only way you can be a member of the Flipkart Plus Loyalty program is if you shop on Flipkart and collect what is called “Plus Coins”. Yeahh…. Plus coins
When you shop for goods worth Rs. 100, Flipkart rewards you 2 free coins. And to gain access to the streaming service you need about 300 coins, meaning a shopping list that includes Rs.15,000 worth of purchases. Seems like a clever little ploy to get consumers to shop at Flipkart
Also, Flipkart’s loyalty program has had to play second fiddle to Amazon’s Prime Subscription for a long while now.
When you buy Prime, you get access to Amazon’s streaming service (Prime Video), faster delivery and a bunch of other perks. With Flipkart, there weren't enough incentives for customers to keep going back. However with the launch of this streaming service, maybe the battle won’t be so lopsided going ahead.
Government does a U-turn after doing a U-turn just yesterday
"Sources” were back at it yesterday suggesting that the government was preparing a complete rollback of the super-rich tax.
Here’s a 20-second refresher course on the entire saga 📚
- The government needed quick money in its coffers
- It decided the best way to do it was by bumping up taxes on Foreign Portfolio Investors (read as rich foreign people investing in India) and announced this on budget day
- FPIs promptly sold their investments in India and moved elsewhere. As the selling pressure increased, markets tumbled
- As investors panicked, they pointed fingers at the government, until the government panicked and said “Sh*t, we need to fix this”
At first, these rumours were only about temporary concessions in bits and pieces, until yesterday the rumours gained full momentum and culminated in what sources believed — “a complete rollback.”
At this point there have been so many flip flops, we won’t be surprised if the government just turns around and says “What FPI, we don’t know any FPIs, haven’t got a clue”
Also, if you want to know more about FPIs and the role they play in spurring the economy, I bet you'll like this explainer from Investopedia.
And that's the wrap-up for today.