Sunday, Sep 20, 2020 | Last Update : 05:34 PM IST

180th Day Of Lockdown

Maharashtra118801585793332216 Andhra Pradesh6177765307115302 Tamil Nadu5364774812738751 Karnataka5113454048417922 Uttar Pradesh3362942632884771 Delhi2347011981034877 West Bengal2155801870614183 Telangana1713061397001033 Odisha167161133466722 Bihar164224149722855 Assam150349121610528 Kerala12221687341490 Gujarat119088999083271 Rajasthan109088906851293 Haryana103773816901069 Madhya Pradesh97906743981877 Punjab90032658182646 Chhatisgarh7777541111628 Jharkhand6710052807590 Jammu and Kashmir5971138521951 Uttarakhand3713924810460 Goa2678320844327 Puducherry2142816253431 Tripura2069612956222 Himachal Pradesh11190691997 Chandigarh92566062106 Manipur8430653951 Arunachal Pradesh6851496713 Nagaland5306407910 Meghalaya4356234232 Sikkim2119178923 Mizoram15069490
  Business   Economy  13 Apr 2020  India's near-term growth outlook has deteriorated sharply: RBI Governor Das

India's near-term growth outlook has deteriorated sharply: RBI Governor Das

PTI
Published : Apr 13, 2020, 2:04 pm IST
Updated : Apr 13, 2020, 2:04 pm IST

Reserve Bank will remain vigilant and will not hesitate to use any instrument to mitigate the impact of Covid-19

 Reserve Bank of India (RBI) Governor Shaktikanta Das. (PTI PHOTO)
  Reserve Bank of India (RBI) Governor Shaktikanta Das. (PTI PHOTO)

Mumbai: All-out efforts are needed to mitigate the adverse impact of the Covid-19 pandemic, and the RBI will use any instrument necessary to revive growth and preserve financial stability, according to the minutes of the central bank's policy meeting.

The Monetary Policy Committee (MPC), headed by Reserve Bank of India (RBI) Governor Shaktikanta Das, was originally scheduled for March 31, April 1 and 3, 2020, but was advanced in view of the coronavirus pandemic.

 

After the three-day meeting which ended on March 27, the RBI reduced the key policy rate by 75 basis points.

To mitigate the economic difficulties arising out of the virus outbreak, the government of India has announced a comprehensive package of Rs 1.70 lakh crore, covering cash transfers and food security, for vulnerable sections of society.

As per the minutes of the MPC meet, released by the RBI, Das said the global macroeconomic situation has abruptly worsened in the last fortnight or so.

In his opinion, "there is a rising probability" of a global recession, which may be deeper than the one experienced during the global financial crisis.

 

"In India also, the near-term growth outlook has deteriorated sharply: initially reflecting global spillovers and the amplification of the impact of Covid-19; and thereafter, due to the much-needed efforts by the government to contain the pandemic by declaring a nationwide lockdown," he said.

On the inflation front, Das said the outlook has changed drastically.

The governor said the usual uptick that begins in summer months may remain subdued if demand conditions take longer to normalise. The weakening of domestic aggregate demand may also help to contain core inflation.

"The Covid-19 pandemic is an invisible assassin which needs to be contained quickly before it spreads and wreaks havoc on valuable human lives and the macro economy.

 

Das said monetary policy needs to proactively arrest any deterioration in aggregate demand as he advocated a 75 basis reduction in repo rate.

"The Reserve Bank will continue to remain vigilant and will not hesitate to use any instrument – conventional and unconventional – to mitigate the impact of Covid-19, revive growth and preserve financial stability," he said.

RBI Deputy Governor and MPC member Michael Debabrata Patra said India has locked down and a state of siege prevails in wake of coronavirus outbreak.

Several types of activities have come to a standstill with social isolation, supply disruptions, demand contraction and heightened anxiety.

 

In these challenging circumstances, Patra opined monetary policy has to assume an avant garde role.

Ravindra H Dholakia too voted for the rate cut.

"There is still enough space for the policy rate cut as and when required to support growth recovery going forward since inflation is likely to be under control," he added.

Pami Dua and Chetan Ghate had advocted a reduction in repo rate by 50 basis points.

The RBI went ahead with the majority vote and reduced the key lending rate by 75 basis points

Tags: shaktikanta das, coronavirus pandemic, reserve bank of india, monetary policy committee (mpc), coronanvirus lockdown, covid 19 outbreak
Location: India, Maharashtra, Mumbai (Bombay)