New Delhi: At a time when the economy of the country is through a rough patch, Reserve Bank Governor Shaktikanta Das on Monday said that the Central government must continue structural reforms with an effort to revive demand and support the economy. Also Read - Transmission of Rate Cuts Improving Steadily: RBI Governor Shaktikanta Das
He said that the green shoots are now visible and need to be sustained to pull the country out of its current slowdown. Also Read - Govt Spending Plays Major Role in GDP Numbers: RBI Governor Shaktikanta Das
Speaking in an interview to PTI, the RBI governor stated that the fallout of the outbreak of novel coronavirus in China needs to be closely monitored by every policymaker to tailor a swift response. Also Read - India's GDP Growth at 5% Came as Surprise, Worse Than All Predictions: RBI Governor Shaktikanta Das
Appreciating the Union Budget for 2020 presented by Finance Minister Nirmala Sitharaman, Das said the recent steps have created a facilitating eco-system for reviving demand and consumption. He further added that undertaking land and labour reforms also need to be taken.
The RBI governor further said that global trade and business uncertainties together with sluggish domestic demand leading to lower capacity utilisation at factories and twin balance sheet crisis of rising non-performing assets (NPAs) or bad loans on the one hand, and heavily indebted corporates on the other, for the slowdown of the economy.
“There are certain positive evidences visible. Things are slightly picking up but we have to wait and see whether these positive trends are sustaining themselves and we have to see how durable they are,” he said.
He also added that the country’s economic growth is expected to drop below its previous quarter rate of 4.5 per cent in October-December despite the slight recovery in the industrial production and positive manufacturing PMI mainly due to the low growth in manufacturing and construction as well as the private consumption.
(With inputs from PTI)