Money & Banking

RBI board reviews current economic situation

Our Bureau Mumbai | Updated on February 16, 2021 Published on February 16, 2021

Representative image   -  istock

The Central Board of Directors of the Reserve Bank of India reviewed the current economic situation, global and domestic challenges, among others, at its meeting on Tuesday .

Nirmala Sitharaman, Union Minister of Finance & Corporate Affairs, in her address to the directors, outlined the thinking behind the Budget and the priorities of the government.

In his statement on February 5, the RBI Governor Shaktikanta Das observed that the Budget has provided a strong impetus for revival of sectors such as health and well-being, infrastructure, innovation and research, among others.

Investment climate

This will have a cascading multiplier effect, going forward, particularly in improving the investment climate and reinvigorating domestic demand, income and employment, he added.

“The investment-oriented stimulus under AatmaNirbhar 2.0 and 3.0 (given during the peak of the pandemic) has started working its way through, and is improving the spending momentum along with the quality of public investment.

“Both will facilitate regaining India’s growth potential over the medium-term. The projected increase in capital expenditure augurs well for capacity creation and crowding in private investment, thereby improving the prospects for growth and building credibility around the quality of expenditure,” Das said.

The RBI has projected India’s real GDP growth at 10.5 per cent in 2021-22 – in the range of 26.2 to 8.3 per cent in H1 (April-September 2021) – and 6.0 per cent in Q3 (October-December 2021).

Per the statement, the projection for Consumer Price Index (CPI) based (retail) inflation has been revised to 5.2 per cent in Q4 (January-March) 2020-21 (earlier projection: 5.8 per cent), 5.2 per cent to 5.0 per cent in H1 2021-22 (5.2 per cent to 4.6 per cent) and 4.3 per cent in Q3: 2021-22, with risks broadly balanced.

The board meeting, held under the Chairmanship of Shaktikanta Das, Governor, through video conferencing, also reviewed the various areas of operations of the Reserve Bank, including ways for strengthening Grievance Redress Mechanism in banks.

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Published on February 16, 2021
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