Terming the low Gross Domestic Product (GDP) growth of 5 per cent as a ‘surprise’, the Reserve Bank of India (RBI) Governor Shaktikanta Das has expressed confidence that the economy will look up with a host of measures taken by the government. In order to give a boost to the economy, he said that the central bank has been cutting rates, as slowdown was visible for past few months. The RBI slashed benchmark interest rate four times consecutively since January 2019. The central bank reduced the repo (short term lending) rate by 1.10 percentage points during the year.
Das said “I think with right measures taken, things should improve. It's a positive trend that the government is responding very fast and I don't think we have heard the last from the government with regard to dealing with the current economic situation ... My expectation is that it will be a continuous process and they would definitely be dealing with other challenges”.
With regard to structural reforms, he said the RBI has already pointed out in its annual report. He added “I think one major thing would be agriculture marketing. Definitely, I would expect some action from the government with regard to reforms in agricultural marketing”. Besides, the government announced a slew of measures in three dosages which include a special window for real estate, export incentives, bank consolidation and sops for MSMEs and the automobile sector.
Expressing concern over the Q1 GDP numbers, he said the numbers definitely looked much worse because the RBI had projected 5.8 per cent. He said “I think almost everybody had projected not below 5.5 per cent or so, but the number 5 per cent is a surprise.” He also said the second quarter growth of all advanced economies was lower than the first quarter so there is a deceleration. He said “But again I am not trying to justify our slowdown through the prism of the global slowdown although global slowdown does impact growth and results in slowdown we have domestic issues also”.
