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Nirmala Sitharaman on growth: Lot of efforts by govt, RBI … mood is changing

She conceded that some indicators may have weakened in recent months after showing signs of an uptick but added that they, too, will revive soon.

By: ENS Economic Bureau | New Delhi |
Updated: February 28, 2020 1:22:24 am
Nirmala Sitharaman, Reserve Bank of India, Sitharaman on banking crisis, Indian economy, RBI, Indian express Finance Minister Nirmala Sitharaman at a press conference in Guwahati, Thursday. (PTI)

A day after prodding state-run banks to shun unreasonable risk aversion and boost lending, Finance Minister Nirmala Sitharaman Thursday insisted that green shoots of a recovery are not just visible but sustainable, and that “concerted efforts” of the government and the Reserve Bank of India (RBI) have started yielding results. She conceded that some indicators may have weakened in recent months after showing signs of an uptick but added that they, too, will revive soon.

The FM’s statement came on a day when non-food credit data showed growth crashed to just 6.3 per cent year-on-year in the fortnight through February 14, the lowest pace seen since May 2017.

She also asserted that the latest violence in Delhi and anti-CAA protests haven’t dampened investors’ sentiment. The minister added that the Centre would move into a less-litigation tax regime, which will help investors.

Speaking to media in Guwahati, she said: “There are monthly ups and downs in some indicators. That shouldn’t worry. Very clearly, the FDI inflows are keeping steady, our foreign exchange reserves are doing very well … Inflationary pressures are coming down (after the recent spike in vegetable prices).”

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“You also have the RBI not just monitoring inflation but also coming out with steps that would be treated as stimulus to growth — particularly the steps for MSMEs and realty … So there is a lot of concerted efforts by the government and the RBI and, as a result, I can very clearly see that the mood is gradually changing.”

Commenting on the impact of the coronavirus outbreak, Sitharaman said as per industry feedback, raw material supplies to companies would likely be hit if situation in China doesn’t improve in two months. “We are trying to see what best we can do,” she said.

At Guwahati, the minister held a series of meetings with various stakeholders, including experts and industry executives, to ensure that far-flung areas in the north-eastern region are given greater access to credit. She asked state-run banks to set up more branches and widen their network in these states. Top government officials, including Finance Secretary Rajiv Kumar, Economic Affairs Secretary Atanu Chakraborty and Revenue Secretary Ajay Bhushan Pandey attended the meetings.

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