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Swaminathan Gurumurthy, Director, Central Board, Reserve Bank of India, said the ₹20-lakh crore stimulus package announced by the government is only an “interim announcement” and the final package may come once the Covid-19 pandemic is brought under control. He hoped the Covid situation could be brought under control by August or September this year.
Since the stimuli, so far announced is not final, issues such as the monetisation of fiscal deficit and other such questions can only be taken when the Covid phase ends.
“Our stimuli is not final because the story of Covid has not ended….it is only thereafter (when Covid is managed) that we will be able to assess the total damage, and only then we can say what is the kind of relief that is needed and how far it will go,” said Gurumurthy at a special e-session organised by the Bharat Chamber of Commerce on Tuesday.
Economic revival
According to him, the revival in growth would be fast once this pandemic is brought under control, and there will be a greater demand growth in India with exports growing.
While full economic activity in the sense that people are expecting might take about a year or more to recover, however, there would be some businesses, particularly in the healthcare and wellness industry, that might become more and more important going forward.
“I see a huge shift to India….growth in India will be faster not just because of local factors, which is likely to be slow, but due to global factors, and this would start reflecting slowly from the fourth quarter of this fiscal and witness a disproportionate increase from the first quarter of next fiscal,” he pointed out.
Banks might not be able to drive the growth, but will play an important role in arresting the fall. The growth will have to come from internal and external demand.
The NPA norms that are currently in place in India are not attuned to the Indian requirements and is a copy of western models, he said, and added that as a part of Atmanirbhar Bharat, we should try and come up with an ideal economic model best suited for India.
“We will have to work out models at various levels and only when we decouple ourselves from western slavery we can do that,” he said.
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