Home / News / India /  Watch for this week: MPC meeting, phase 1 of UP polls

Every Monday, Mint’s Plain Facts section features key data releases and events to track in the coming week. The politically charged Assembly election season begins this week with 58 seats going to polls in Uttar Pradesh in the first phase. The Reserve Bank of India (RBI) will announce its monetary policy review. In the entertainment world, film enthusiasts will watch for Oscar nominations for this year. The following are some of the things to watch out for.


1. RBI’s monetary policy

The February monetary policy committee (MPC) meeting of the Reserve Bank of India (RBI) is often quite significant as it is held against the backdrop of the Union budget announcements. This year, the government’s focus on capital expenditure is set to boost borrowing markedly, which the central bank will have to manage amid rising bond yields. Experts will keep an eye on RBI’s strategy to manage the high borrowing levels at the monetary policy announcement on Thursday.

Also, the inflation situation has been deteriorating, with consumer price index (CPI) inflation nearing the upper tolerance limit of 6%. An adverse base effect and elevated core inflation will keep the MPC on its toes. The budget is inflation neutral, but worries over existing price pressures and likely tightening by the US Federal Reserve could mark the beginning of a hike cycle, with many economists expecting RBI to raise the reverse repo rate at this meeting itself, before going for a repo rate hike.



2. State elections

The first phase of polling in 58 constituencies across 11 districts of Uttar Pradesh kicks off on Thursday. This year’s Assembly poll season will include six more phases in UP and elections in Punjab, Uttarakhand, Manipur, and Goa until 7 March, with results due on 10 March. The Election Commission of India has extended until 11 February its ban on public rallies and road shows amid the third covid wave. But it has relaxed some restrictions on public meetings and door-to-door campaigning. Amid the curbs, political leaders have been giving press interviews and addressing constituents through the electronic media. The heat is on, with several politicians switching sides.

UP, which sends the most members to Parliament, bears a special significance for national politics. The elections come in the middle of Prime Minister Narendra Modi’s second term, and, thus, the result will be read as a vote on his regime as well.


3. Mutual fund flows

The Association of Mutual Funds in India (Amfi) will release the data on mutual fund inflows for January this week. Despite the looming risks from the new covid-19 variant, and the Federal Reserve’s hawkish signals, equity mutual funds received record inflows of 24,989.57 crore in December and monthly SIPs continued to trend higher, at 11,305 crore. A major correction in markets in November encouraged investors to enter the markets through the mutual fund route. Redemptions were down 49% while fund mobilization registered a 67% year-on-year growth.

Net asset management for equity funds rose 47% on a yearly basis as the headline index Sensex gained nearly 2% in December after a 4% fall in November. The enthusiasm is expected to stay even as foreign portfolio investors turn net sellers.


4. US inflation

Retail inflation in the US continued to rise and hit almost a four-decade high of 7% in December 2021. Prices have remained stubbornly high amid an unprecedented demand for goods, while supply constraints of both labour and raw materials refuse to ease.

The increase in CPI inflation during the month was primarily led by higher prices for shelter and used vehicles while the energy index fell after a long series of increases. With rampant spending and supply bottlenecks still at play, the price pressures are expected to have been at elevated levels in January, too. The data will be released on Thursday.

The persistent inflation has led to a perceptible shift in the policy stance of the Federal Reserve as it has scaled down its policy support and hinted at interest rate hikes. It plans to aggressively reduce its balance sheet, too, and will focus on preventing inflation from becoming entrenched.


5. Oscar nominations

If fine cinema by over-the-top (OTT) platforms was already a phenomenon, the covid-19 pandemic and stay-at-home orders gave further fillip to streaming services. Many films that would usually be released only in theatres were premiered on streaming platforms, too. Will this lead to streaming services taking a bigger pie at the upcoming Academy Award nominations?

OTT platforms first made it to the coveted Best Picture category in 2019 with Netflix’s Roma and their share has only grown since, with two nominations in 2020 and three in 2021. This year, too, some of the top contenders are being distributed by streaming services such as Netflix and Apple Original Films.

The Golden Globe Awards that concluded earlier last month signal this. The Power of the Dog, which saw a limited release in theatres and a worldwide release by Netflix, is a frontrunner. CODADon’t Look UpThe Lost Daughter, and Tick, Tick... Boom! are other favourites distributed by OTT platforms this Oscar season. 

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