NEW DELHI: In a symposium on the Indian Economy in Tokyo, Governor Shaktikanta Das emphasized India’s resilience amid global challenges. Despite macroeconomic and geopolitical shocks worldwide, India maintained stability through proactive, pragmatic and prudent policy responses.
Das said, “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 targeted liquidity, avoiding a liquidity trap. Regulatory actions included measured support, moratoriums on loan repayments, and loan resolution frameworks. Reforms in banking and financial systems strengthened India’s economic foundation.
Das said, “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 said India had emerged as a stable and opportunistic economic powerhouse, with robust growth, 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”, said Das.
The RBI Governor also highlighted the country’s young demography, improved infrastructure, and enabling policy environment position it as a global growth engine.
Das stated, “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 15-64 years. 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”, said the RBI Governor. (ANI)
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