on May 06, 2021)NEW DELHI: The Reserve Bank of India (RBI) stands in “battle readiness” to ensure that financial conditions remain congenial and markets continue to work efficiently, governor Shaktikanta Das said on Wednesday, asserting that the dent to aggregate demand is expected to be moderate in comparison to the previous year.
“We will work in close co-ordination with the government to ameliorate the extreme travails that our citizens are undergoing in this hour of distress. We are committed to go unconventional and devise new responses as and when the situation demands,” Das said in an unscheduled address amid the sharp surge in Covid cases.
“We must also stay focused on our future, which appears bright even at this juncture, with India set to emerge as one of the fastest growing economies in the world,” the RBI governor said, emphasising that the growth prospects remained strong despite the ravaging impact of the virus.
He said the immediate objective was to preserve human life and restore livelihoods through all means possible. “The second wave, though debilitating, is not unsurmountable. It is during our darkest moments that we must focus on the light. We have lessons to draw from our experience of last year, when as a nation we came together and overcame the once-in-a-generation challenge imposed by the first wave of the pandemic,” Das said as he unveiled measures to provide relief and financing for the healthcare sector.
“We must remain resolutely focused on a post-pandemic future of strong and sustainable growth with macroeconomic and financial stability. I call upon all stakeholders to come forward once again to address the challenges posed by the current wave of the pandemic, while remaining on guard against future waves,” said Das.
He said aggregate demand conditions, particularly in contact-intensive services, are likely to see a temporary dip, depending on how the Covid situation unfolds. With restrictions and containment measures being localised and targeted, businesses and households are learning to adapt, said Das.
The RBI governor said a normal south-west monsoon, as forecast by the IMD, should help to contain food price pressures, especially in cereals and pulses. The build-up in input price pressures across sectors, driven in part by elevated global commodity prices, remains a concern.
