New measures include Rs.1 lakh crore for banks
India is set for a three-speed economic recovery, depending on sector-specific realities, Reserve Bank of India (RBI) Governor Shaktikanta Das told a press conference on 9 Oct 2020.
“In my view, it is likely to be a three-speed recovery with individual sectors showing varying paces, depending on sector-specific realities,” said Das as he announced several additional measures to revive the economy
The measures include Rs.1 lakh crore liquidity chest for banks for lending via bonds and commercial papers in specific sectors.
The RBI confirms the Indian economy is set to contract 9.5% in fiscal 2021 as widely estimated by surveys and rating agencies.
Leading the recovery would be agriculture and allied activities; FMCG; two-wheelers, passenger vehicles and tractors; drugs and pharmaceuticals; and electricity generation, especially renewable.
The RBI has also revised the differential risk weights applicable to individual housing loans, based on the size of the loan as well as the loan-to-value ratio (LTV).
The RBI will maintain comfortable liquidity conditions and will conduct market operations in the form of outright and special open market operations of Rs.20,000 crore each.
Das cautioned a section of the industry when announcing steps to improve the flow of credit to specific sectors while maintaining credit discipline.
He also unveiled steps to boost exports, deepen financial inclusion and provide more credit to the SMEs.
The Indian economy is expected to enter a decisive phase in the fight against the pandemic as several high-frequency indicators point to the easing of contractions and the emergence of growth impulses, according to Das.
“The mood of the nation has shifted from fear and despair to confidence and hope,” he noted.
Sectors that were resilient and labour-intensive would be the first to do well, believes Das.
Agricultural marketing reforms, accent on value chains encompassing cold storage, transport and processing and changes in labour laws will attract fresh investment, said the RBI chief. #economy #exports #manufacturing #banking #loans #trade /fiinews.com
