Page 54 - Policy Economic Report - April 2025

POLICY AND ECONOMIC REPORT
OIL & GAS MARKET

adoption of advanced technologies—such as continuous miners, longwall systems, remote sensing tools,
and AI-based safety mechanisms—which will boost productivity while ensuring ecological balance.

These forward-leaning reforms mark a strategic shift toward cleaner and more sustainable coal extraction
practices. They are poised to unlock the vast untapped potential of underground mining in India, fostering
innovation, reducing carbon emissions, and contributing meaningfully to the nation’s energy security and
Atmanirbhar Bharat objectives.

With this visionary roadmap, the Ministry of Coal is not only reshaping the future of coal mining but also
reaffirming its role as a catalyst in India’s journey toward self-reliant and environmentally responsible
industrial growth.

RBI Issues April 2025 Policy Update

RBI Cuts Repo Rate to 6%, Projects 6.5% GDP Growth for FY 2025-26

Introduction

The Monetary Policy Committee (MPC), in its 54th meeting and the first of the financial year 2025–26,
unanimously decided to reduce the policy repo rate by 25 basis points, bringing it down to 6 per cent with
immediate effect. The repo rate is the rate at which the Reserve Bank of India (RBI) lends money to
commercial banks, and a cut in this rate is aimed at boosting lending and investment. This decision comes
at a time when global economic conditions are becoming increasingly uncertain. Trade tensions have
resurfaced, leading to a decline in crude oil prices, weakening of the US dollar, softening bond yields, and
corrections in equity markets. While central banks across the world are adjusting their policies to address
domestic concerns, they are doing so cautiously.

Within India, the outlook has shown signs of improvement. Inflation, particularly food inflation, has
declined more than expected, offering some relief, though global and weather-related risks remain.
Growth is recovering after a weak first half in the previous financial year, but it still falls short of the
country’s potential. The Monetary Policy Report of April 2025, released alongside the MPC resolution,
also outlines the GDP growth forecast and inflation projection for the coming months. This year also marks
a milestone for the RBI as it completes 90 years since its establishment on 1st April 1935. Over the
decades, it has evolved into a full-service central bank, balancing its roles of managing inflation,
supporting growth, and ensuring financial stability.

Key Policy Decisions

• The Monetary Policy Committee (MPC) unanimously decided to reduce the policy repo rate by 25
basis points, bringing it down to 6 per cent with immediate effect. The repo rate is the rate at
which the Reserve Bank of India (RBI) lends money to commercial banks.

• As a result, the Standing Deposit Facility (SDF) rate under the Liquidity Adjustment Facility (LAF)
has been adjusted to 5.75 per cent. The SDF allows banks to park excess funds with the RBI
without any collateral.

• The Marginal Standing Facility (MSF) rate and the Bank Rate have both been revised to 6.25 per
cent. MSF stands for Marginal Standing Facility, a provision made by the RBI that enables

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