‘Private investment should resume to maintain growth’
THE RBI GOVERNOR ALSO ASKED BANKS TO IMPROVE THEIR CAPITAL MANAGEMENT PROCESS
MUMBAI: Numerous macro indicators suggest that the economic recovery is now taking hold after the beating it has taken during the pandemic, but for growth to be sustainable and reach its potential, private capital investment has to resume, the Reserve Bank Governor said on Tuesday.
RBI Governor Shaktikanta Das said the economy has the potential to grow at a reasonably high pace in the post-pandemic scenario, provided private capital investment resumes.
Despite many economists revising down their growth forecasts between 8.5 and 10% for the current fiscal, the central bank has not changed its forecast of 9.5% for the year so far.
Addressing a banking function—which he said is his first since the pandemic begin in March 2020, the governor asked banks to be investment-ready when the investment cycle picks up, which the RBI feels to begin from the next fiscal. It can be noted that since 2013, private capital has been missing from the economy and many are of the view that this should begin from mid-next fiscal.
Even though he took solace in the fast-improving balance sheets of banks, the governor said gross bad loans of banks have come down in the September quarter from the previous quarter.
Das also asked banks to improve their capital management process. Lauding the tech entrepreneurs, the governor said the country has emerged as a top performer in the startup landscape, attracting billions of foreign capital.
Earlier, Das had said the central bank has serious concerns as “far deeper” issues are involved in cryptocurrency.
The remarks come amid reports that the government is likely to table a cryptocurrency bill in the upcoming winter session of Parliament, which is likely to be held at the end of the month.
“When the central bank says we have serious concerns after due internal deliberations, there are far deeper issues involved,” said Das.