Finance minister Nirmala Sitharaman outlined the main points of the Union Budget for 2021-22 and discussed the road map to fiscal consolidation and borrowing plan with the Reserve Bank of India’s central board in their first meeting after the presentation of the Union budget.

According to tradition, the finance minister holds a customary meeting with the board members of the RBI and the Securities and Exchange Board of India (Sebi) after the budget presentation every year.

The finance minister addressed the 587th RBI central board meeting and informed the members about the key initiatives in the budget and the priorities of the government, the RBI said in a statement.

“Complimenting the finance minister on the budget, the board members made various suggestions for consideration of the government,” it added.

The board reviewed the current economic situation, global and domestic challenges and various areas of operations of the RBI, including ways for strengthening of grievance redress mechanism in banks.

Earlier this month, the finance minister presented a Rs 34.5 lakh crore-budget for 2021-22 in the backdrop of the coronavirus pandemic. The budget has laid emphasis on increasing capital expenditure, raising allocation for healthcare capacity building and development of agriculture infrastructure, among others.

In the aftermath of the disruptions wrecked by the coronavirus pandemic, the economy is expected to contract 7.7% this financial year ending in March. The RBI has pegged real GDP growth at 10.5% for fiscal 2021-22, based on factors such as improved capacity utilisation at factories and energy demand.

Fiscal deficit is expected to hit a record high of 9.5% of GDP in the current fiscal. For fiscal 2021-22, fiscal deficit is pegged at 6.8% of GDP.

RBI governor Shaktikanta Das has assured that the central bank will support the Rs12 lakh crore government borrowing program in the next financial year in a non-disruptive manner.

In its monetary policy committee (MPC) meeting earlier this month, RBI announced several measures, such as allowing retail investors to open Gilt or G-Sec accounts with the central bank, a move that will help deepen India's bond market.

The meeting, held via videoconferencing, was attended by minister of state for finance and corporate affairs Anurag Singh Thakur, finance secretary Ajay Bhushan Pandey and secretary, Department of Investment and Public Asset Management, Tuhin Kanta Pandey, among others.