New Delhi: RBI Governor Shaktikanta Das on Wednesday said that the Indian economy is showing signs of stbility and he assured the industry that the central bank will take all necessary measures to ensure liquidity in the system and promote economic growth. He was addressing a virtual conference organised by industry body Ficci.
Das said that Gross Domestic Product (GDP) data released by the government was a “reflection of the ravages of the COVID-19”. Observing that the economic recovery was not yet fully entrenched, the RBI Governor said recovery is likely to be gradual.
Worth mentioning here is that Indian economy contracted by 23.9% in the April-June quarter of the current financial year.
The RBI reduced repo rate by 115 basis points to 4% since March 2020. Das said low interest rate and high liquidity ensured low borrowing cost for the government. In his address, Das spoke about the initiatives taken by the central bank to ease the liquidity situation and make available funds to the businesses impacted by the pandemic and subsequent lockdowns.
The Governor also assured the industry that “RBI is battle ready… whatever measures are required will be taken by the RBI” to help the industry and businesses to come out of the COVID-19-induced crisis. Further, he asked businesses to capitalise on the new opportunities created by the pandemic at the global level.
Emerging markets have bounced back and reduction in policy repo rates has eased key operations, he said, adding current G-sec borrowing rates are the lowest in last 10 years and bond yields have softened. ” Rs 3.2 trillion of bond issuance in corporate bond market has happened till 28 August,” he added.
Speaking on sectors where investment can be made to revive growth, Das said expenditure on education needs to be raised. “Must pursue goal of 6% public investment in education.”
“There are five key areas that I propose to focus on that I think will determine stability and step up India’s growth in the medium term. First is human capital with specific emphasis on education and health; second is productivity; exports which is leading to India’s role in the global value chain; fourth tourism; food processing associated productivity areas,” said Das.
