Reserve Bank of India (RBI) governor Shaktikanta Das on Wednesday said India was at the “doorstep of revival” even as he maintained that the government will have to spell out its fiscal road map post the Covid-19 pandemic.
Das made these comments while speaking at the virtual launch of the book, Potraits of Power, written by N.K. Singh, the chairman of the Fifteenth Finance Commission.
He said while India is at the cusp of a recovery, it is also important that banks and non-banking finance companies (NBFCs) have adequate capital to support growth and ensure credit flow when the economy revives.
While India’s economy contracted 23.9 per cent in the first quarter of this fiscal, Das had projected a “three-speed recovery”, with individual sectors showing varying paces of growth.
According to the monetary policy committee (MPC), the recovery in the rural economy will be faster than in the urban areas even as the contact-intensive services sector will take time to regain the pre-Covid levels.
The interest rate setting body has projected real GDP growth in 2020-21 to contract 9.5 per cent, with risks tilted towards the downside.
Though Das did not throw much light on the economic recovery, he said once the pandemic is contained, the government will have to spell out the fiscal roadmap and adhere to the debt-to-GDP target that the N.K. Singh panel had recommended.
TLTRO scheme
The RBI on Wednesday announced an “on-tap” targeted long-term repo operations (TLTRO) scheme of up to Rs 1 lakh crore to enable banks to provide liquidity support to a host of sectors.
