GDP Will Bounce Back Sharply: RBI Governor
New Delhi: Reserve Bank of India Governor Urjit Patel on Friday said India’s economic growth will make a “sharp V” recovery following the recall of old ₹ 500 and ₹ 1,000 notes.
Patel also made a strong case for continuing with globalisation even in the face of a potential shift to trade protectionism under US President Donald Trump as India has benefited from open trade.
“Almost everyone agrees that the impact is going to be a sharp ‘V’, that we would have a downgrade of growth for a short period of ti- me,” he said in a TV interview. “However, the remonetisation has happened at a fast pace and that was part of the plan.” RBI last week lowered economic growth for the current fiscal to 6.9% from the previously projected 7.1%, but saw it bouncing back in a big way to 7.4% in 2017-18.
He said the benefit of junking 86% of currency in circulation will take time to fully play out and needs more work to ensure they are lasting.
“I think that it is important that one grows a thick skin fast in this business and I think we have done that. We have gone about our work, we had undertaken major challenges during these past few months and valid criticism is something that we are open to and we take it in the spirit in which it is given and try to improve ourselves,” he said. Asked when India could achieve 9% GDP growth, he said it is difficult to predict sustainable growth rates. Higher growth rate is possible if very fundamental reforms, especially in factors of production like land and labour, are undertaken, the governor said.
RBI Governor Urjit Patel