The country’s economic recovery is likely to be gradual as the rising infections continue to pose a risk, RBI Governor Shaktikanta Das said on Wednesday.
Addressing the FICCI National Executive Committee Meeting, the central bank chief said that the economic recovery is not fully entrenched. He added that the GDP data for the first quarter (Q1) was a telling reflection of how COVID-19 affected the economy.
“The recovery is, however, not yet fully entrenched and more over in some sectors the optics which was noticed in June and July, they appear to have levelled off… by all indications, the recovery is likely to be gradual as efforts towards reopening of the economy are confronted with increasing infections,” he said.
Das also stressed that the Indian central bank stands battle-ready to take whatever steps that are needed to be taken for the economy.
Persistently large liquidity infusion by RBI has ensured large borrowing by the government at a low rate and in a non-disruptive manner, the RBI governor said.
In his address, Das spoke about the initiatives taken by the central bank to ease the liquidity situation and make available funds to the businesses impacted by the pandemic and subsequent lockdowns.
He said that the central bank’s efforts have led to the softening of bond yields. Das also said that the RBI is very carefully monitoring the markets and will take further actions as and when required. The RBI governor said that the current bond yields are lowest in the past 10 years due to surplus liquidity.
Talking about the loan recast, the RBI chief said that the interests of depositors and financial stability were kept in mind while framing the loan restructuring scheme.
He also asked businesses to capitalise on the new opportunities created by the pandemic at the global level.
Speaking about the education sector, Shaktikanta Das said that the sector contributes to economic development and the New Education Policy is historic and also much needed new age reform. About the tourism sector, he said that it could be an engine of growth and there is a lot of pent-up demand which needs to capitalised.
– with PTI inputs