Reserve Bank of India Governor Shaktikanta Das on Friday said the central bank would take steps to maintain financial stability and help create favourable conditions for growth.
“The foremost priority is to preserve domestic macroeconomic and financial stability, especially in a global environment that is clouded by high uncertainty,” BloombergQuint quoted Das as saying at the Vibrant Gujarat Summit. This was his first public address since taking charge of the central bank.
Das said large volatilities and wide divergences in inflation in food, fuel and remaining groups pose a challenge to inflation assessment, which requires a careful analysis of new data. “While food inflation has turned negative since October 2018 and fuel inflation has been highly volatile, inflation excluding food and fuel remains sticky at close to 6%,” he said, according to The Indian Express.
Das said growth was expected to be sustainable now, fuelled by private consumption and investment. Quoting the projections of the International Monetary Fund and the World Bank, Das said India would grow at around 7.5% a year in the medium term. “We will take necessary steps to maintain financial stability and to facilitate enabling conditions for sustainable and robust growth,” he added.
Das said the Reserve Bank of India would strengthen the asset liability framework for non-banking financial companies, reported Mint. He also said it would be critical to contain non-performing assets. “There is need for continued vigil on the asset quality of banks and resolution of stressed assets with a focus on implementation of the new resolution framework,” he said. “Another area where policy action is required is corporate governance in banks with a focus on transparency and accountability.”
Earlier on Friday, Prime Minister Narendra Modi said at the Vibrant Gujarat summit that India was trying to be one of the top 50 countries in the ease of doing business list by next year.