NEW DELHI: The Congress on Wednesday attacked the Centre after the Reserve Bank of India (RBI) raised the repo rate by 25 basis points to 5.50%, saying the move would further increase the financial burden on the public.Calling Prime Minister Narendra Modi “inflation man”, the Congress said, “Inflation Man Modi’s reign of terror continues. Now the public’s back will be broken even further.”The party said the rate hike would push up borrowing costs for home, car, personal and business loans, resulting in higher EMIs and potentially longer repayment periods. “To curb inflation as per Modi’s intent, the RBI has today raised the repo rate by 25 basis points to 5.5%,” it said.“This means your home loan, car loan, personal loan, and business loan interest rates will now increase. Now you’ll have to pay higher EMIs, and the loan repayment period will also get extended. The promise was of ‘good days,’ but what we got were days of extortion,” he added.The RBI’s monetary policy committee unanimously approved the hike and shifted its stance from neutral to calibrated tightening, citing stronger-than-expected economic growth and broader price pressures.The rate increase would raise the monthly EMI on a Rs 1 crore home loan with a 15-year tenure by around Rs 1,500, assuming a base rate of 8.50%. If borrowers keep their EMI unchanged, the higher interest rate could extend the repayment period by roughly six instalments.
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The RBI also raised its FY27 real GDP growth forecast by 40 basis points to 7.1%, while increasing its inflation projection by 20 basis points to 5.2%. RBI governor Sanjay Malhotra said stronger capacity utilisation, bank credit growth, government capital expenditure and infrastructure spending were supporting investment and demand.CPI inflation rose to 4.8% in August from 4.5% in July. Malhotra said price pressures had broadened beyond volatile items, with food inflation becoming more widespread, including higher sugar and onion prices.The Congress said the government’s promise of “good days” had instead delivered “days of extortion”.
