Economic recovery likely to be gradual, but RBI battle-ready: Das1 min read . Updated: 16 Sep 2020, 12:26 PM IST
- Economic recovery is not fully entrenched and that the GDP data for the first quarter was a telling reflection of how covid-19 affected the economy
Mumbai: Reserve Bank of India governor Shaktikanta Das on Wednesday said the country’s economic recovery is likely to be gradual as it is still reeling under the impact of the pandemic.
Addressing the FICCI National Executive Committee Meeting, Das said economic recovery is not fully entrenched, adding that the GDP data for the first quarter was a telling reflection of how covid-19 affected the economy.
He said the central bank stands battle-ready to take whatever steps are needed for the revival of the economy.
India’s economy contracted 23.9% in the June quarter at the steepest pace in four decades. The performance was worst among G20 nations, and significantly below expectations of most economists.
Das also said persistent liquidity measures undertaken by the RBI have ensured borrowing by the government at a low rate and in a non-disruptive manner.
He said the central bank’s efforts have led to the softening of 10 year government securities to the lowest level and that RBI was very carefully monitoring the markets and will take further actions as and when required.
While bank credit growth remains muted, commercial bank investment in bonds, commercial papers, debentures and shares of corporates between April and August have increased to ₹5,615 crore as against a decline of ₹32,000 crore in the same period last year, he added.
"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.