India’s economy is ‘almost at the door of revival,’ Governor Shaktikanta Das of the Reserve Bank of India said on Wednesday, adding that once the revival took place, banks and non-banking financial companies (NBFCs) had raised or were in the process of raising capital to ensure adequate credit availability for businesses.
The monetary policy of the RBI and the fiscal policy of the government operated with an expansionary orientation and an accommodative as well as counter-cyclical posture in symmetry, Mr. Das said. Once the worst effects of the pandemic have been controlled, the government will have to reconsider its fiscal roadmap, he said.
Stressing the need for urgent governance changes in both public and private sector banks and NBFCs, Mr. Das said that since the 2008 global financial crisis, this has been a lingering problem and needs attention.
The central bank chief added that the RBI had asked all banks and NBFCs to create capital reserves so that credit is available to support growth when the revival phase of the economy begins.
India’s gross domestic product ( GDP) was expected to be Rs 145.65 lakh crore ( US$ 2.06 trillion) for 2019-20 (at constant 2011-12 prices), rising 4.2 percent over the previous year.
India maintained its place of over 8,900-9,300 start-ups as the third largest start-up base in the world as 1,300 new start-ups were incorporated in 2019, according to a NASSCOM report. In 2019 (till August 2019), India also witnessed the addition of 7 unicorns, bringing the overall tally to 24.
According to a report by the ASSOCHAM and Think Arbitrage Research Institute, India’s labour force is projected to cross 160-170 million by 2020 based on the pace of population growth , increased labour force participation etc.
According to RBI reports, India’s foreign exchange reserves reached Rs 37.31 lakh crore ( US$ 493.48 billion) in the week to May 29, 2020
Recent developments in Indian economy
Some recent developments in Indian economy are as follows:
In 2019-20, merchandise exports and imports (in US$ terms) decreased by 4.8% and 9.1%, respectively.
In May 2020, the Nikkei India Manufacturing Purchasing Managers ‘ Index ( PMI) stood at 30.8, indicating industry contraction due to coronavirus-related constraints.
In 2019-20, gross tax revenue stood at Rs 15.04 lakh crore ( US$ 215.28 billion); Rs 4.80 lakh crore (US$ 68.14 billion) contributed to the income tax collection.
In 2019, through 17 initial public offers (IPOs), businesses in India raised about US$ 2.5 billion.
The Index of Industrial Production (IIP) of India for 2019-20 was 129.2.
In March 2020, the combined index of eight core industries stood at 137. In 2019-20, its cumulative development was 0.6 per cent.
Consumer Price Index ( CPI): In March 2020, combined inflation was 5.9%, compared to 6.6% in February 2020. Annual consumer price inflation rose from 3.4% in 2018-19 to 4.8% in 2019-20.