New Delhi [India], November 9 (ANI): In a symposium on the Indian Economy in Tokyo, Governor Shaktikanta Das emphasised India’s resilience amid world challenges. Despite macroeconomic and geopolitical shocks worldwide, India maintained stability by way of proactive, pragmatic and prudent coverage responses.
Das stated, “The global economy continues to face multiple macroeconomic and geopolitical shocks. The prediction of a global recession has not come true but there are indications that global growth is slowing down amid tightening financial conditions and still elevated inflation. Even as the fallouts of the pandemic, the war in Ukraine and the unprecedented tightening of monetary policy reverberate across the world, the recent developments in West Asia have added to the litany of challenges for the global economy”.
During the COVID-19 pandemic, India injected focused liquidity, avoiding a liquidity entice. Regulatory actions included measured assist, moratoriums on mortgage repayments, and mortgage decision frameworks. Reforms in banking and monetary techniques strengthened India’s financial basis.
Das stated, “To protect the economy from the relentless shocks in the recent period, our endeavour has been to remain proactive, pragmatic and prudent in our policy response. We were conscious of the fact that an overdose of monetary medicine while relieving the pain in the short run, could give rise to increased vulnerability and fragility over a period of time”.
Das added, “Following the onset of the COVID-19 pandemic, we injected liquidity, but almost every measure of liquidity injection was for a limited period and was targeted. By doing so, we avoided the pitfall of a liquidity trap. Further, our lending standards were not diluted in terms of our counterparties (banks) and collateral requirements for on-lending to stressed entities or sectors”.
The RBI Governor stated India had emerged as a steady and opportunistic financial powerhouse, with sturdy development, moderated inflation, and strengthened macroeconomic fundamentals.
“We have come out with certain governance guidelines for banks and introduced a scale-based regulation for non-bank financial companies (NBFCs), based on the size and complexity of their businesses. The process of supervision of banks, NBFCs and other financial entities has also been substantially strengthened with the focus being on early detection and pre-emptive correction, rather than reacting to the symptoms of weaknesses”, stated Das.
The RBI Governor additionally highlighted the nation’s younger demography, improved infrastructure, and enabling coverage setting place it as a world development engine.
Das acknowledged, “Today, India has become the new engine of global growth with its young demography, improving physical and digital infrastructure and 1 India is endowed with a great demographic dividend as 68 per cent of the total population estimated at 1.429 billion in the latest World Population Report 2023 (United Nations Population Fund) belongs to 15-64years. 4 above all, an enabling policy environment”.
“We look up to the Japanese “Economic Miracle” as a learning opportunity as we prepare the ground to uplift India’s growth trajectory. Japan has played a critical role in infrastructure building in India through several public and private sector partnerships”, stated the RBI Governor.
Shaktikanta Das stated that ties between India and Japan type a robust basis. Collaborations in infrastructure initiatives and alternatives in frontier applied sciences like AI, quantum computing, and resilient provide chains are promising.
“Policy focus on strengthening macroeconomic fundamentals and continued structural reforms have made India distinct in terms of growth outcomes. This was reflected in the rebound in GDP growth after the pandemic from a contraction of 5.8 per cent in 2020-21 (pandemic year) to a growth of 9.1 per cent in 2021-22 and 7.2 per cent in 2022-23” Das stated.
He added, “The GDP grew by 7.8 per cent in the first quarter of 2023-24, and the available high-frequency indicators suggest the continuation of this momentum. For the full year 2023-24, real GDP growth is projected at 6.5 per cent by the Reserve Bank”.
India’s well-diversified financial construction and deal with home demand contribute to its resilience. The post-pandemic restoration noticed non-public consumption as a major GDP contributor.
Prudent financial and monetary insurance policies, together with supply-side measures, performed key roles in managing inflation.
RBI Governor stated, “India is currently the world’s third largest FinTech ecosystem in terms of the number of FinTechs operating in India. It is growing at a robust pace and is projected to generate around US$200 billion in revenue by the year 20306, contributing to approximately 13 per cent of the global FinTech industry’s total revenue in 2030”.
India’s FinTech ecosystem, pushed by authorities initiatives and personal sector innovation, has positioned the nation as a world participant.
The JAM Trinity and UPI have revolutionized monetary inclusion and digital transactions. The introduction of the e-rupee and a customer-centric strategy showcase India’s dedication to monetary innovation.
Das stated, “As things stand today, the MPC in its October 2023 meeting has projected CPI inflation at 5.4 per cent for 2023-24, a moderation from 6.7 per cent in 2022-23. Headline inflation, however, remains vulnerable to recurring and overlapping food price shocks”.
“The core inflation has also moderated by 170 basis points since its recent peak in January 2023. In these circumstances, monetary policy remains watchful and actively disinflationary to progressively align inflation to the target, while supporting growth”, he added.
Governor Das emphasised India’s sustained development trajectory, underlining the significance of avoiding complacency within the face of uncertainty.
The partnership with Japan holds immense potential, and India appears to be like ahead to a brand new period of development and prosperity for each nations. (ANI)