(Deepshikha Gautam, Intern Journalist) New Delhi: Reserve Bank of India Governor Shaktikant Das said on Wednesday that India stands on the threshold of economic revival due to the liberal and favorable monetary and fiscal policies of the government and the central bank. He was speaking at the release of the book ‘Portraits of Power: Half a Century of Being at Ringside’ by NK Singh, former bureaucrat and current chairman of the Finance Commission.
He said, “We have almost reached the threshold of economic revival. In such a situation, it is important that financial units have sufficient capital to support growth. ”Das said that many financial units have already raised capital, some are planning to raise capital. He said that he will definitely raise capital in the coming months. He said that as soon as the coronavirus crisis ends, the Reserve Bank will ask all banks and non-banking financial companies (NBFCs) to conduct an internal analysis of the pressure on them.
Das said, “As far as pressure is concerned, I have personally talked to banks and NBFCs. Their activism has affected us to provide adequate capital to our financial units and the need to create a buffer of capital.” He said that the process of capitalization would not only strengthen their flexible approach to deal with financial pressures but would also provide them sufficient funds to grow while maintaining credit flow. On the question of any similarity between fiscal and monetary policy, Das said that both have taken a flexible and liberal approach.
He said, “Both policies are working symmetrically. In fact, fiscal and monetary policies remain counter-cyclical today.” The Governor said that India has to choose the path of fiscal expansion to meet the challenges of covid-19. The government has taken several steps to provide financial assistance to the weaker sections of society. After this, some relief has also been provided to the industry and business category. At the same time, as far as the central bank is concerned, we are already doing monetary expansion. In fact, we have taken many such steps which in reality are not included in the tools of the Reserve Bank. He said that after covid-19, once the epidemic is regained, the government would definitely furnish information about the future fiscal plan.
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