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Home / News / India /  Coming up this week: MPC minutes, Omicron updates, MSME strike

Every Monday, Mint’s Plain Facts section features five events to watch out for in the coming week. The next seven days offer a range of things to look out for—from the minutes of the last meeting of the monetary policy panel to a strike by small businesses across India, and a new cricket tour for the Indian team to the final few days of the government’s vaccination target. Read on:

 

1. RBI Policy Minutes

In an expected move, the Reserve Bank of India’s Monetary Policy Committee once again retained its accommodative stance in a bid to support growth revival at its meeting on 6-8 December. While the vote to keep the repo rate unchanged at 4% was unanimous, it was not the case with its accommodative stance. Jayanth Varma, an external member, once again voted against the current stance. To what extent other members concur with his views will be known on Wednesday when RBI releases the minutes of the meeting.

Amid rising price pressure, the MPC said it was appropriate to wait for growth signals to become firmly entrenched. The policy minutes will also reveal whether the members feel the Omicron variant of coronavirus could turn into a bigger concern than inflationary pressures. Despite its focus on growth, the central bank signalled an aggressive liquidity normalization, which started after the October policy, from January.

 

2. Omicron Updates

The world will await more updates on the Omicron variant this week. First detected less than a month ago in South Africa, Omicron has spread at an “unprecedented rate", the World Health Organization (WHO) has said. The variant has now been found in at least 77 countries in quick time, and the WHO has asked governments to act soon.

This has prompted some Indian states to implement localized restrictions, particularly around the upcoming Christmas and New Year’s Eve celebrations. Last week, the UK saw its highest daily case count since the pandemic began, and health officials in the UK and the EU expect the new variant to overtake Delta as the dominant strain in the coming days.

Vaccine efficacy remains a concern, but more clarity is likely to emerge in the coming days from manufacturers. Infections remain low in India, but enforcing mask compliance during the year-end celebrations will be a headache for authorities.

 

3. MSMEs Strike

High raw material costs have been eating into profits of businesses around the world for the past several months. In India, an association of over 170 groups of micro, small, and medium enterprises (MSMEs) formed earlier this year has called a strike on Monday to demand the Centre’s intervention to remedy the situation. An estimated one million MSMEs are likely to shut factories for a day and call for a one-hour protest in front of government offices.

High metal and fuel prices have forced small businesses to downsize operations and delay paying staff, as they are yet to recover from lockdowns. A recent Mint analysis showed this was true even of listed firms: 38% of BSE-listed companies, mostly small businesses, struggled to match pre-covid sales in the September quarter, though the broad picture was positive.

 

4. Vax Target

Just two weeks are left for India to reach its ambitious goal of vaccinating all 940 million adults against covid-19 by the year-end. The goal remains a mathematical mirage, but the government might aim for a big push in the coming fortnight to ensure that the numbers on New Year’s day look respectable.

While the goal will be missed, the mammoth effort in a country known for its crumbling health infrastructure has been commendable. As many as 88% of adults have got their first shot in under 12 months, and around two months are needed to complete that process at the latest pace. However, vaccine hesitancy may make the fag end of this drive longer than that.

The second-dose coverage has now assumed greater importance amid the Omicron risk. The coverage among adults is 57%, but the pace is inconsistent. At the current rate, India will end the year at 66%. But with children yet to be vaccinated, herd immunity is some time away.

 

 

5. Team India Tour

India's cricket team starts its first Test match on its four-week-long tour to South Africa on Sunday. An ugly captaincy row has left the Board of Control for Cricket in India red-faced, throwing the spotlight on what is set to be a tough tour anyway. Virat Kohli has been replaced by Rohit Sharma as the limited-overs captain, apparently without being informed, even though he stays Test captain.

Some blushes will be spared for a while, because Sharma will skip the Tests due to an injury. The dressing room’s mood will be in for scrutiny when both players take the field later on the tour, during the three one-dayers.

The bio-bubble at a time when the Omicron variant is raging on in South Africa doesn’t make things any easier. However, it’s unlikely that any positive infection will disrupt the tour, as restrictions differ from those during the team’s England tour that was suspended due to a covid-19 case in the Indian camp earlier this year.

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