Reserve Bank of India governor Shaktikanta Das said today that data on economic activity in Q2 suggests stabilization and contractions in several sectors are also easing.
Addressing the FICCI national executive committee meeting, Das said: “By all indications the recovery is likely to be gradual as efforts towards reopening of the economy are confronted with rising infections.”
As per Das, five areas have the potential lift the Indian economy and spur growth: Human capital, productivity, exports, tourism and food processing. He felt India is on threshold of a big opportunity to break into the global value chain.
Das, further, commented on the parameters of relaxation. “We do not want a repeat of the situation which India experienced a few years ago where the NPA levels of banks had gone up steeply. The focus is to assist businesses that are otherwise viable but are seeing cash flow drying up due to disruption. The emphasis is to enable these companies to return to normalcy.”
Commenting on liquidity flow, Das said: “The liquidity line has flown from institutions like NABARD, Sidbi and NHB to cooperative banks. MFs, microfinance institutions and small NBFCs. Further measures would be taken as and when required.”
Das showed his concern on NBFC sector. “We do not want a repeat of the IL&FS crisis in another NBFC. RBI has been rigorously monitoring the top 100 NBFCs.”