Reserve Bank Governor Shaktikanta Das said that the economic growth rate is estimated to be 9.5 percent in the current financial year 2021-22.
The Reserve Bank of India expects to achieve a growth rate of 9.5 percent in the Gross Domestic Product (GDP) in the current financial year 2021-22. Reserve Bank Governor Shaktikanta Das said on Thursday that several quick indicators are showing improvement in economic activity. In such a situation, banks are optimistic about achieving the estimated 9.5 percent growth rate.
Addressing an event organized by ‘The Indian Express’ and ‘Financial Times’, Das said that the second wave of Covid-19 had subsided by August. The growth rate will be better on a quarter-on-quarter basis from the second quarter. Das said that the Reserve Bank has decided to give more emphasis on economic growth due to the pandemic. Along with this, he also has to walk in the range of 2 to 6 percent inflation which the government has fixed for him.
The Governor said that the liquidity position in the global markets is quite smooth. Due to this, the domestic market is booming. He clarified that there is no evidence to suggest that higher property prices are influencing the inflation situation. He said whether or not to continue with the soft stance would be decided by the Monetary Policy Committee. Responding to a question, he said the range of high inflation is not likely to widen.
Das said the non-performing assets (NPAs) of the banking system have now come to such a level that they can be ‘managed’. He underlined that banks have adequate capital buffers. The NPA ratio of the banking system stood at 7.5 percent at the end of the June quarter.
On the question of huge loss to the lenders in the insolvency resolution process, Das said there is scope for improvement in the functioning of IBC. These include legislative changes as well as the time taken for a case in bankruptcy courts.
The governor said that the central bank has conveyed its concerns regarding cryptocurrency to the government. Now the government has to look into this. He said that we need a ‘credible answer’ on what private cryptocurrency will contribute to the Indian economy going forward.