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Structural reforms, fiscal measures key for growth: RBI Guv
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SME Times News Bureau | 24 Jan, 2020
Hinting at more steps to revive
growth, Reserve Bank of India Governor Shaktikanta Das on Friday said
that monetary policy alone cannot support growth and structural reforms
and fiscal measures must continue for this purpose.
"Monetary
policy, however, has its own limits. Structural reforms and fiscal
measures may have to be continued and further activated to provide a
durable push to demand and boost growth," he said while delivering a
lecture at the St Stephen's College here on "Seven Ages of India's
Monetary Policy".
He said the government is focusing on
infrastructure spending which will augment growth potential of the
economy. States should also play an important role by enhancing capital
expenditure, which has a high multiplier effect.
Among the most
important fiscal measures the government has taken so far is the cut in
corporate taxes, apart from a host of sectoral measures.
With
retail inflation touching 7.35 per cent in December, the highest in six
years, the Governor allayed fears over the current spike in inflation,
saying it is triggered due to food prices rise.
He pointed due to
the RBI's consistent efforts, inflation has fallen successively and has
averaged below 4 per cent since 2017-18, notwithstanding recent up-tick
in inflation driven by food prices, especially the sharp increase in
vegetable prices, reflecting the adverse impact of unseasonal rains and
cyclone.
The efforts, Das said, related to the RBI fine-tuning
its operating procedures of monetary policy for effective policy
transmission across the financial markets and thereby onto the real
economy.
The Governor highlighted the potential growth drivers
which, through backward and forward linkages, could give significant
push to growth. According to him, these include food processing
industries, tourism, e-commerce, start-ups and efforts to become a part
of the global value chain.
He said RBI is constantly updating
assessment of the economy based on incoming data and survey based
forward looking information juxtaposed with model-based estimates for
policy formulation.
"This approach helped the Reserve Bank to
use the policy space opened up by the expected moderation in inflation
and act early, recognising the imminent slowdown before it was confirmed
by data subsequently," he said.
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Customs Exchange Rates |
Currency |
Import |
Export |
US Dollar
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66.20
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64.50 |
UK Pound
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87.50
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84.65 |
Euro
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78.25
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75.65 |
Japanese
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58.85 |
56.85 |
As on 13 Aug, 2022 |
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