“It’s very important that the financial entities have adequate capital (to support growth),” he said. Many of them have already raised capital and others are planning, he mentioned, adding they would certainly do so in the coming months.
Both fiscal and monetary policy were counter-cyclical and accommodative and both were working in close symmetry, RBI chief added.
The fiscal measures taken by the government to deal with the pandemic have so far have been well calibrated and prudent, Das mentioned. “The central government has provided prudent measures to provide financial support to weaker sections and small business,”he stated.
“I think post COVID, once there is containment of pandemic, the government will certainly have to spell out a fiscal roadmap that India should adopt,” he further added.
On stress in the banking and NBFC sector, RBI governor said, “We need to build capital buffer for banks, NBFCs to deal with stress caused by COVID-19”
Das was speaking at the launch of the book ‘Portraits of Power: Half a Century of Being at Ringside’, written by former bureaucrat and current chairman of the Finance Commission N K Singh.
To prevent the virus spread in the country, the central government imposed a nationwide lockdown in the last week of March. It resulted in the economy contracting by a record 23.9% during April-June.
Indian economy is projected to contract by a massive 10.3% this year, according to an International Monetary Fund (IMF) forecast. The Reserve Bank of India expects the economy to shrink by 9.5% in the current financial year.
