Economy

Mood of doom and gloom is not helping: RBI Governor

Our Bureau Mumbai | Updated on August 19, 2019 Published on August 19, 2019

RBI Governor Shaktikanta Das addressing the FIBAC 2019 conference organised by FICCI in Mumbai on Monday   -  Paul Noronha

Shaktikanta Das urges business leaders to look at the positive cues in the economy

Urging leaders of the business and financial sectors to look at the opportunities that lie ahead and maintain a positive sentiment, RBI Governor Shaktikanta Das on Monday said the mood of doom and gloom is not going to help anyone.

“In the morning when I read the newspapers or open any business TV channel, the mood doesn’t seem to be sufficiently positive and optimistic. Now, one does realise that there are challenges in the economy. One does realise that there are sectoral issues.

“One does realise that there are severe external, global headwinds. And, today, India is a part of the global economy. Obviously, India cannot be an exception and cannot live in isolation. But let me say that the mood ranges from an existential angst to a more positive outlook,” said Das at the FICCI-IBA Banking Summit here.

These observations come in the backdrop of the Monetary Policy Committee (MPC) underlining the continuing weak domestic economic activity, with the global slowdown and escalating trade tensions posing downside risks. Private consumption, the mainstay of aggregate demand and investment activity, remains sluggish. The automobile sector is in the midst of a slowdown, with growing fears of its ripple impact on the entire automobile value chain — component manufacturers, dealers and financiers.

Growth worries

The real GDP growth for 2019-20 was revised downwards earlier this month by the MPC to 6.9 per cent from 7 per cent in the June policy.

The RBI Governor appealed to business and financial sector leaders to look at the opportunities that lie ahead. It is the sentiment that matters, he insisted.

“We do realise that there are challenges coming from external and domestic sources but I think one has to look at the opportunities,” he said. “One has to maintain a positive sentiment and capitalise on these opportunities because the mood of doom and gloom is not going to help anyone.

“It is not going to help the bank, not going to help the business, not going to help the real economy. But, at the same time, I am not saying that we maintain a kind of Panglossian countenance, that we smile away every difficulty.

“But I think it is very important in any business, in any real economy — it is the sentiment, it is the mood which is very important.”

The Governor emphasised that there are several opportunities amidst the challenges that the economy faces today. The financial sector, business community, policy makers and regulators such as the Reserve Bank should together look at the opportunities, address the challenges and forge ahead with greater confidence, he added.

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Published on August 19, 2019
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