human development

The Sensex erased initial gains and fell 195 points on Tuesday after RBI kept key interest rate unchanged and lowered economic growth estimate to 5.8 per cent for 2012-13, from 6.5 per cent projected earlier.
A fall in interest-linked banking, realty and auto stocks mainly influenced the trading sentiment.

Marketmen  investors ignored RBI move to reduce the cash reserve ratio - the percentage of deposits banks keep with the Reserve Bank - by 0.25 per cent to infuse additional liquidity that will inject Rs 17,500 crore into the financial system.


CRR now stands at 4.25 per cent.
The Sensex, which had opened with gains on investor hopes of interest rate cuts, fell following the policy announcement to trade at 18,441.26 -- showing a decline of 194.56, or 1.04 per cent at 1151 hrs. The broad-based National Stock Exchange index Nifty was down by 68.15 points to 5,597.45.


 The government seems miffed with the Reserve Bank of India (RBI) not cutting rate in its policy review today. The central bank kept interest rates unchanged despite government coming out with a fiscal consolidation plan a day before the policy. The RBI cut the Cash Reserve Ratio by 25 basis points.




"Growth is as much a challenge as inflation. If government has to walk alone to face the challenge of growth then we will walk alone," Finance minister P Chidambaram said after the monetary policy.

Chidambaram's five-year plan to repair government finances

"Government is doing its best to send the clear message that we are on the path of fiscal consolidation. It is govt. hope that everyone will read and understand the government commitment to path of fiscal consolidation.




Deputy chairman of the planning commission Montek Singh Ahluwalia was also disappointed that the central bank had not cut rates.