Mumbai: Swiss brokerage firm UBS does not expect any decision to cut the repo rate in the RBI MPC meeting to be held next month. It believes that the central bank may give some relief in the meeting to be held in December. The brokerage firm says that due to low food inflation and good monsoon, RBI can cut the rate by up to 0.75 percent during the current financial year.

As far as India's consumption growth is concerned, it will increase from four percent in FY 2023-24 to over six percent in FY 2024-25. It has also talked about a reduction in the K-shaped consumption pattern.

In its report, UBS said that GDP growth will remain at the level of 6.5-7 percent mentioned in the Economic Survey and it will not touch the 7.2 percent estimated by the RBI. The wasteful expenditure of the states where elections are to be held soon will have to be closely monitored.

Swiss brokerage firm UBS believes that if the current governments of these states spend excessively on welfare schemes, then this will affect the capital expenditure in the coming years.

The UBS Securities report said that a total of 11 states have either held elections or are going to polls in the near future. Of these, four states - Maharashtra, Madhya Pradesh, Rajasthan and Odisha - have increased their fiscal deficit targets.

The report said that in the past few years, states have managed to control the deficit of three per cent proposed by the Fifteenth Finance Commission, but the current situation is not very comforting. Electoral states are increasing their spending on welfare schemes and incentives, which has led to an increase of 0.20 per cent in their current fiscal year fiscal deficit estimate.

Let us tell you that the Eknath Shinde-led government in Maharashtra has announced to deposit Rs 1,500 every month in the accounts of women, which will result in an expenditure of more than Rs 35,000 crore annually.