Page 22 - Policy Economic Report_Feb'25

POLICY AND ECONOMIC REPORT
OIL & GAS MARKET

National Framework for GCC: A national framework to be formulated as guidance to states for
promoting Global Capability Centres in emerging tier 2 cities.

7. Reforms as fuels

FDI in Insurance Sector: The FDI limit for the insurance sector to be raised from 74 to 100 per
cent, for those companies which invest the entire premium in India.
Credit Enhancement Facility by NaBFID: NaBFID to set up a ‘Partial Credit Enhancement Facility’
for corporate bonds for infrastructure.
Grameen Credit Score: Public Sector Banks to develop ‘Grameen Credit Score’ framework to serve
the credit needs of SHG members and people in rural areas.
Pension Sector: A forum for regulatory coordination and development of pension products to be
set up.
High Level Committee for Regulatory Reforms: A High-Level Committee for Regulatory Reforms
to be set up for a review of all non-financial sector regulations, certifications, licenses, and
permissions.
Investment Friendliness Index of States: An Investment Friendliness Index of States to be
launched in 2025 to further the spirit of competitive cooperative federalism anounced.
Jan Vishwas Bill 2.0: The Jan Vishwas Bill 2.0 to decriminalize more than 100 provisions in various
laws.

Inflation in India
In January 2025, India's retail inflation, measured by the All-India Consumer Price Index (CPI), eased to a
five-month low of 4.31%, down from 5.22% in December 2024. This decline was primarily driven by easing
food prices, including vegetables and pulses. The reduced inflation rate has increased expectations for
potential rate cuts by the Reserve Bank of India (RBI) to stimulate economic growth, which is projected to
slow to its lowest pace in four years.

Specifically, the CPI for Agricultural Labourers (CPI-AL) and Rural Labourers (CPI-RL) decreased by 4 and 3
points, respectively, reaching 1316 and 1328 points in January 2025. Year-on-year inflation rates based
on CPI-AL and CPI-RL were 4.61% and 4.73%, respectively, compared to 7.52% and 7.37% in January 2024.

The moderation in inflation has allowed the RBI's Monetary Policy Committee to shift focus towards
supporting economic growth. With inflation trending towards the target of 4%, the committee reduced
the repo rate by 25 basis points to address the slowdown in growth, which is forecasted at 6.4% for the
fiscal year. Overall, the easing inflation in January 2025 provides a conducive environment for monetary
policies aimed at stimulating economic growth.

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