There is no need to be frustrated in the market due to the economic slowdown in the country, because the Reserve Bank of India (RBI) has started working to overcome it. According to RBI Governor Shaktikanta Das, there are signs of return to investment. Because of which it is expected that the economic crisis will be resolved soon. For this, he stressed on the need to organize the entire country and focus on manufacturing and said that India should also be a part of the global supply chain. If India does this, India’s economic crisis will soon go away.
What are the signs of economic slowdown?
According to RBI Governor Shaktikanta Das, the central bank has started taking precautionary measures in view of the sluggish growth rate and has started cutting interest rates from February-2019. He said that along with reduction in interest rates, effective steps will also be taken to increase liquidity to increase growth. Referring to the survey of 1,539 companies by RBI, he said that signs of investment cycle revival have started coming.
In the future too, the process of cleaning the books of accounts is going on in banks, companies and non-banking financial companies to promote economic growth. This time about not cutting the interest rate, Das said, ‘I don’t know why the market is so shocked by the temporary ban on policy interest rate cuts? He said that we have every hope of being proved right over time on this decision. ‘
Are local causes not recession?
The RBI governor said that India needs to focus on manufacturing and needs to be a part of the global supply chain. The spending on infrastructure by the central and state governments is also very important for economic growth. According to Das, all developed and emerging economies need to be taken in a coordinated and time bound manner to overcome global economic slowdown. Hopefully, there will be an understanding between the US and China on trade and this understanding will be further strengthened. He said that it is not right to blame only global causes for the slowdown of the economy in India.
What do experts say about ending a recession?
On the other hand market experts say that the reason for the economic slowdown is the reduced consumption. Therefore, there is a need to increase the purchasing power of the common people of the country. Companies benefited from the government’s cut in corporate tax, but customers should have got it, which was not found. The Maruti Company has also given its benefit to customers, but other car companies or real estate have not done so. Private consumption accounts for 60 percent of the country’s GDP. Its level was 10.6 percent in the fourth quarter of 2017-18, which has come down to 3.14 percent in the first quarter of 2018-19. That is why the government should take measures to increase consumption as well as focus on encouraging companies and increasing foreign capital investment in the country. For this, the government should make provisions such as reduction in income tax rate, so that if more money comes in the hands of the people, then they will go out in the market to make purchases.