Reserve Bank Governor Shaktikanta Das recently said that to support the countercyclical measures which are taken by the government, structural reform are required to be continued to revive demand and support the economy.
He also said that the green shoots are now visible and need to be sustained to pull India out of its current slowdown.
In an interview with media, he said the fallout of the outbreak of novel coronavirus in China needs to be closely monitored by “every policymaker” to tailor a swift response.
Recently government has taken some steps to facilitate eco-system for reviving the demand and consumption by concentrating on the infrastructure projects. It is necessary to conduct the land and labour reforms for bringing efficiencies in Agri marketing and focus on skill development, the RBI governor said.
In 2009, economy saw a huge slow down in early months of 2019 and used the space that was opened up by the moderation in inflation to cut interest rates on five consecutive occasions, he mentioned.
He mentioned global trade and business uncertainties together with sluggish domestic demand. These are leading to lower capacity utilisation at the factories and twin balance sheet crisis of rising non-performing assets (NPAs) or bad loans on the one hand, and heavily indebted corporates on the other, for the slowdown of the economy.
“There are certain positive evidences visible. Things are slightly picking up but we have to wait and see whether these positive trends are sustaining themselves and we have to see how durable they are,” he said.
When asked if the 4.5% in july- september He refused to say if the growth slowing down to 4.5 per cent in the July-September was the bottom of the pit that the economy can see. “As I have said there are evidences of positive developments. But we have to see how durable are these positive developments before we pass a judgment that from here on it is an upward trajectory.”
“By and large, if you look at our projection which we have given, things should start improving in the next financial year. We have projected 6 percent of GDP growth for 2020-21 against 5 percent for the current fiscal,” he said.