Reserve Bank of India Governor Shaktikanta Das today said that India is among the handful of countries which, as per the IMF, are expected to cling on to positive growth of 1.9 percent despite the economic downturn being witnessed due to the COVID-19 outbreak.
“The mission is to do whatever it takes to prevent the curve from steepening further. In this environment, the RBI has been proactive and has been monitoring the situation closely,” Das said, in a televised address.
In a bid to encourage banks to invest, the central bank has reduced reverse repo rate by 25 bps from from 4 per cent to 3.75 percent.
The RBI will also provide a special finance package of Rs 50,000 crore to NABARD, CIDBI and NHB–Rs 25,000 crore will be disbursed to NABARD, Rs 15,000 crore to SIDBI and Rs 10,000 crore to NHB. “These amounts are based on conversations with these institutions,” Das said.
The RBI Governor said that IMF’s projection of 1.9 percent GDP growth for India is the highest among G20 nations and that as per IMF projections, India is expected to post sharp turnaround in 2021-22.
Das further said that while automobile production and sales declined sharply in March and electricity demand fell sharply, there was no downturn of internet and mobile banking during the lockdown period and that banking operations were normal.
The RBI governor further said that the contraction of exports in March at 34.6 percent was much more severe than the global financial crisis of 2008-09.
Das added that RBI will monitor the evolving situation continuously and will use all tools to deal with the fallout of the pandemic. “We are confident that we shall cure and endure,” he said.