RBI focusing on lowering inflation and speeding up, resolution of distressed projects
As India strives to regain its place in the ranks of prosperous nations, we must remember that what sets poor nations apart from the rich is not people or resources or even luck but good governance, which comes from strong frameworks and strong institutions.
The short term macroeconomic priorities of the Reserve Bank of India are to help growth by bringing down inflation in line with the proposed glide path, thus creating room for monetary easing; and work with the Government and banks on speeding up the resolution of distressed projects and cleaning up bank balance sheets, stated Dr. Raghuram Rajan, Governor, Reserve Bank of India, at FIBAC 2015 in Mumbai on August 24, 2015.
While addressing the two-day event on the theme 'Inclusive Growth with Disruptive Innovations', jointly organised by the Federation of Indian Chambers of Commerce and Industry (FICCI) and Indian Banks' Association (IBA) with Boston Consulting Group (BCG) as knowledge partners, Dr. Rajan said, “While low inflation for a while will lower the public's inflationary expectations and increase their real disposable income, in order to achieve a sustainable victory against inflation the public has to believe that inflation will stay low even after commodity prices start picking up in the future. For the public to look through future price spikes without raising wage demands, the RBI has to have credibility that it will act firmly against any future inflationary threats. Credibility comes from frameworks and institutions.”
The Governor said, “The RBI has signed a historic agreement
Dr. Jyotsna Suri, President, FICCI (left) and Arun Kaul, Chairman Incharge, IBA and CMD, UCO Bank, presenting a green certificate to Dr. Raghuram Rajan, Governor, Reserve Bank of India.