Prime Minister Narendra Modi on Friday praised the Reserve Bank of India for the measures it had announced earlier in the day to revive the economy, in the midst of the coronavirus pandemic. Modi said the measures will enhance liquidity and improve credit supply, thus helping small businesses.
“Today’s announcements by the RBI will greatly enhance liquidity and improve credit supply,” Modi said. “Today’s announcements by the RBI will greatly enhance liquidity and improve credit supply. These steps would help our small businesses, MSMEs [micro, small and medium enterprises], farmers and the poor. It will also help all states by increasing WMA [ways and means advances].”
Earlier in the day, RBI Governor Shaktikanta Das slashed the reverse repo rate, the rate at which the central bank borrows from commercial banks, from 4% to 3.25%. The step is aimed at encouraging banks to lend more.
Das added that the central bank has decided to allocate Rs 50,000 crore to small Non-Banking Financial Companies to improve the liquidity position of small and medium enterprises. He also claimed that the Indian economy would rebound in 2021-’22, registering a growth rate of 7.4%.
The RBI’s measures also came in for praise from Union Home Minister Amit Shah, who also commended the Modi-led government. “[The] Modi government is leaving no stone unturned in fight against COVID19, ensuring minimum disruption in people’s lives while planning for a strong & stable India in days ahead,” Shah tweeted. He said that the steps taken by the RBI will further boost Modi’s vision for the Indian economy.
“RBI’s decision to extend 20,000cr credit facility to NABARD, 15,000cr to SIDBI will greatly help our farmers, provide much needed financial stability to MSMEs and start ups, boost the Make in India programme,” Shah added.
Bharatiya Janata Party National President Jagat Prakash Nadda said the RBI’s announcements will “help protect the livelihoods of the Indian people”. He too claimed that the announcements will provide a fillip to Modi’s effort to keep the economy strong during and after the pandemic.
But the Congress was unhappy with the central bank’s announcements. Congress leader Ajay Maken said that the government should take more measures to help those affected by the coronavirus, PTI reported. However, Maken did not elaborate on his objections.
India has so far reported 13,387 cases of the coronavirus, and 437 deaths, according to the Ministry of Health and Family Welfare.