NDTV Profit Pulse: Top Financial News for March 5, 2025
In a significant turnaround, Indian markets ended a prolonged downturn as key indices showed positive momentum on March 5, 2025. The Reserve Bank of India (RBI) announced plans to enhance liquidity in the banking sector, while other notable developments unfolded in the financial and economic landscape of India and beyond. Here is a comprehensive overview of the day’s top financial stories.
RBI’s Liquidity Enhancement
The Reserve Bank of India revealed that it would conduct open market operation (OMO) purchase auctions to inject additional liquidity into the banking system. The central bank aims to purchase government securities worth ₹1 lakh crore in two phases, with each auction worth ₹50,000 crore. The first round is scheduled for March 12, followed by another on March 18. Additionally, the RBI will carry out a dollar-rupee buy/sell swap auction for $10 billion, effective March 24—a move designed to bolster liquidity amid ongoing challenges.
Recent Forex Swap Auction
This announcement follows a successful bid earlier this week, where a $10 billion forex swap attracted strong interest, amidst a liquidity deficit in the market. The RBI’s proactive measures are intended to stabilize financial conditions and assure market participants.
Concerns Over Credit Lines
The RBI has raised alarms over non-bank lenders offering perpetual credit lines, which allow borrowers to access funds without fixed repayment schedules. The regulator expressed concerns that these lending practices may lead to the ‘evergreening’ of loans, wherein borrowers use new credit to settle existing debts. This warning comes as the RBI aims to safeguard financial stability and ensure that lending practices remain sound and sustainable.
Finalization of Digital Data Protection Rules
In another key development, the Indian government has concluded public consultations on the Digital Personal Data Protection regulations. With no further extensions for public comment, the final rules are expected to be published shortly. These regulations are set to reshape the landscape of data protection in India, reflecting the government’s commitment to safeguarding citizens’ digital privacy.
Market Rebound: Nifty Ends Losing Streak
After experiencing a challenging ten-day period, the Nifty 50 index recorded a 1.15% increase to close at 22,337, while the Sensex rose by 1.01% to settle at 73,730. This marks the end of Nifty’s longest losing streak in nearly three decades, as all sectoral indices finished higher, with notable gains in the Nifty Metal and Nifty Media sectors.
China’s Economic Growth Target
On the global front, China has set its GDP growth target at approximately 5% for the year 2025, maintaining a steady outlook despite ongoing trade tensions with the United States. Notably, China’s fiscal deficit target is projected at around 4% of GDP, marking the highest level in over thirty years, reflecting increased government spending to support economic stability.
High Earners Exploring Tax Deductions
In the realm of personal finance, high-income earners in India are increasingly leveraging Section 80GGC of the Income Tax Act, which allows deductions for donations to political parties. This tax-saving strategy, available under the old tax regime, has gained traction, with intermediaries facilitating such transactions—raising concerns about the integrity of political financing.
Looming Air Conditioner Shortages
With summer approaching, India may face potential air conditioner shortages due to delays in shipments of compressors and components. Manufacturers including Voltas and Blue Star have indicated their readiness to manage a moderate demand rise, but warn that a significant increase could result in stock shortages.
Updates on Income Tax Bill
Lastly, new regulations outlined in the proposed Income Tax Bill, 2025, may grant tax officials unprecedented access to the electronic communications of taxpayers if they suspect undisclosed income. Effective from April 1, 2026, these provisions could reshape the audit landscape for individual taxpayers, emphasizing the need for compliance and transparency.
Conclusion
As these developments unfold, market participants and stakeholders are encouraged to stay informed and proactive in navigating the evolving economic landscape. From liquidity measures by the RBI to significant regulatory changes, these events highlight the interconnected nature of finance, governance, and market dynamics in an increasingly complex environment.
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