Shaktikanta Das said that there are many positive trends visible in the economy but it has to be seen whether they are sustained.
Even as the government is confident about the economic recovery, RBI Governor Shaktikanta Das said that there are many positive trends visible but it has to be seen whether they are sustained. In an interview with The Indian Express, Shaktikanta Das added that the FDI numbers, bank credit to the commercial sector, and the overall fund flow have improved. However, he underlined that it is lower on an on-year basis, but still, it is picking up and its sustenance has to be checked.
Citing seven green shoots last week, Finance minister Nirmala Sitharaman said the economy was set to turn around and it is not in trouble. She had mentioned higher FDI, FPI, foreign exchange reserves, PMI and GST collections, higher industrial growth in November, and buoyant stock markets as other indicators of economic revival.
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While the slowdown in the Indian economy started to show the indications from 2018, it came as a surprise to almost everybody in 2019. However, the RBI Governor said that they were not so surprised as most others and they proactively cut rates, against the market expectations. He added that the RBI started cutting rates from February 2019 because the slowdown in the growth momentum was very clearly visible from the incoming data.
Meanwhile, the old clash between the government and the RBI seems to take the back seat as Shaktikanta Das confirmed that there is ample space for independence and autonomy in the central bank and all the decisions are taken by the RBI in the last year are its own objective and independent decisions. When the government has any concern about any issue which impacts the economy, the central bank has to consider those issues. Similarly, there are issues raised by the RBI with the government for its consideration, he added.