Shaktikanta Das says economic recovery stronger than expected; surge in coronavirus poses downside risks

By: |
Updated: November 26, 2020 12:48 PM

The Indian economy has exhibited a stronger than expected momentum in activity, said RBI Governor Shaktikanta Das.

RBI, reserve bank, RBI Governor, Shaktikanta Das, FEDAIThe calibrated opening up of economy can supplement domestic savings, and help fund the growth requirements.

RBI Governor Shaktikanta Das today said that after seeing a sharp GDP contraction in the first quarter, the Indian economy has exhibited a stronger than expected momentum in activity. However, he added that even as the growth outlook has improved, downside risks remain with respect to the surge in Covid infections. “We need to be watchful about the sustainability of demand after festivals and a possible reassessment of market expectations
surrounding the vaccine,” he further said.  The calibrated opening up of the economy can supplement domestic savings, and help fund the growth requirements, Shaktikanta Das underlined while speaking at the 4th Annual Day of Foreign Exchange Dealers’ Association of India (FEDAI).

The RBI governor said that market participants responded with alacrity and together we have been able to ensure stable and resilient markets across all segments. Further, a comfortable external balance and current account surplus have brought comfort. He added that internationalisation of financial markets can lower transaction costs with efficiency gains. He underlined that capital account is convertible to a great extent today.

Also Read: GST officials catch massive tax fraud of Rs 2,350 crore, fake invoices, ITC claims

Shaktikanta Das noted that the Reserve Bank has taken steps to usher in the next phase of reforms to accelerate the pace of liberalisation. The recent reform measures, many of which are in the works, have been fashioned around the four major themes of (i) liberalising financial markets and simplifying market regulation; (ii) internationalising financial markets; (iii) safeguarding the “buy side” – user protection; and (iv) ensuring resilience and safety.

Meanwhile, the RBI Governor said that simplifying regulations and providing procedural flexibilities have also contributed to easing operating conditions and thereby reducing costs and inefficiencies. While some operational constraints are inevitable, especially those warranted by prudential considerations, RBI’s approach has been to ease operating conditions within these considerations. Concluding his remarks, Shaktikanta Das said that the achievement of desired outcomes is contingent on financial institutions and market participants taking forward the reform agenda so that India has vibrant financial markets and efficient financial intermediation.

Do you know What is India expected to grow 10 pc during current fiscal: NCAER Director General Poonam Gupt,FinMin releases Rs 9,871 cr grant to 17 state, Cash Reserve Ratio (CRR), Finance Bill, Fiscal Policy in India? FE Knowledge Desk explains each of these and more in detail at Financial Express Explained. Also get Live BSE/NSE Stock Prices, latest NAV of Mutual Funds, Best equity funds, Top Gainers, Top Losers on Financial Express. Don’t forget to try our free Income Tax Calculator tool.

Financial Express is now on Telegram. Click here to join our channel and stay updated with the latest Biz news and updates.

Next Stories
1Gati Shakti, digitisation, ‘Make in India’ discussed as Finance Minister Nirmala Sitharaman meets top CEOs in New York
2Too early to conclude on lessons learnt from COVID-19 crisis: Nirmala Sitharaman
3Indo-US ties: Sitharaman, Yellen say focus on firm recovery policy