Reserve Bank of India Governor Raghuram Rajan says that India should focus on protecting the economy

Reserve Bank of India Governor Raghuram Rajan says that India should focus on protecting the economy

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Mumbai: Policy-makers should focus on protecting the economy as opposed to business conflicts amid the coronovirus epidemic, which is what Raghuram Rajput, former governor of the rating agencies, Reserve Bank of India (RBI) has said.
“It is necessary to convince both domestic and international investors that we will return to fiscal responsibility in the medium term after the epidemic crisis is over and the government should make more efforts to persuade them,” Rajan said. Global Markets Forum.
India was placed under one of the world’s tightest lockdowns in late March to halt the spread of coronaviruses, but cases have been steadily increasing since the restrictions were relaxed in June, raising hopes for an economic recovery is.
The government has announced a number of initiatives to help the poor and small and medium-sized businesses, but real cash has been estimated by government measures at around 1% of GDP.
There are a number of reasons for the shift from Fitch to Outlook due to fears of fiscal rudeness following Moody’s India’s ratings and outlook decline in early June.
The central bank has also slashed the key lending rate by 115 basis points to top 135 bps last year, but has decided to keep rates stable on day one against market expectations as inflationary pressures have increased.
“The RBI and the government are definitely cooperating, but it seems that somewhere else, the ball is in the government’s court to do more,” Rajan said.
He said that RBI needs to focus on whether credit is reaching the stressed sectors of the economy and also if viable firms are able to access credit and are not inefficient.
“And I think that’s where the focus is on its characteristics, because resources, as you well know, are limited in India today.”
To ease debt pressure on companies and lenders, the RBI said on Thursday that it would allow restructuring of corporate loans by banks, a move that was widely awaited by the industry.
Governor Shaktikanta Das said that there is scope to cut rates further but the central bank will ensure inflation within its target range. Most analysts expect it to reduce rates once inflation is brought under control.
Government officials have also announced that any more fiscal stimulus can be announced, it will only come in the second half of the fiscal year, once recovery begins and coronavirus cases reach peak.
Rajan said that India should focus on this point and protect its economic capabilities, so that it can resume when it is dealt with by the virus. This can be done appropriately.
“And if it does, there is no reason that rating agencies will not see it as a suitable policy.”


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