RBI Gave New Estimates Regarding The Progress Of Economy

RBI gave new estimates regarding the progress of the Indian economy, said for the third wave – companies should be ready.

The Reserve Bank of India is expected to achieve a growth rate of 9.5 percent in the Gross Domestic Product (GDP) in the current financial year 2021-22.

Apart from this, RBI Governor Shaktikanta Das said that the central bank will take steps to bring inflation to the target of 4 percent.

Das said several quick indicators are showing improvement in economic activity. In such a situation, the central bank is hopeful of achieving the estimated 9.5 percent growth rate.

The governor said the continuation of the soft monetary stance would be decided by the Monetary Policy Committee (MPC).

He said that in order to carry forward the slowdown in economic growth due to the pandemic, the Reserve Bank has decided to take advantage of the two percent range in case of inflation and keep it in the range of 2 to 6 percent.

Due to the high rate of inflation, the Reserve Bank has kept interest rates unchanged for more than a year. In the last meeting of the MPC, one of the six members had insisted on withdrawing the soft stand.

Experts say that the Reserve Bank will change its stance before withdrawing the pandemic measures or increasing interest rates.

Das said the second wave of Covid-19 had subsided by August. The growth rate will be better on a quarter-on-quarter basis from the second quarter.

He said that in this sense, the September quarter will be better than the June quarter. He said the only uncertainty is the third wave of the pandemic.

He said the business sector and companies are yet to learn how to deal with such bottlenecks.

“Going forward, as inflation targeting institution, our focus will be to bring it down to 4 percent over time. Its timing is to be fixed.

Today is not that time.” The government has set this target for the medium term”. Inflation in July stood at 5.7 percent.

RBI gave new estimates: Das said the reason for the rise in inflation is supply-side factors. These also include high prices of commodities.

He underlined that high prices of petrol and diesel are also the reasons for the rise in inflation. He said the central bank is in constant touch with the government on the issue.

He also mentioned the steps taken by the government to reduce the prices of edible oils and pulses.

Das said that the Reserve Bank has decided to give additional focus on growth. If growth derails, long-term challenges arise for the revival of the economy.

The governor said that instead of the target of four percent during the pandemic, the central bank decided to work in the range of two to six percent.