With the Chhattisgarh government’s efforts to prevent the spread of coronavirus getting praises from all quarters, even the Reserve Bank of India Governor has lauded the state for registering a robust economic growth driven by uninterrupted agricultural and allied activities during lockdown.
RBI Governor Shaktikanta Das in his statement today said Chhattisgarh is leading in sowing of kharif crops and other agricultural activities despite adverse conditions during the lockdown.
Describing the increased sowing of paddy in Chhattisgarh and other states as “silvers of brightness amidst the encircling gloom”, the RBI governor said that the efforts in increasing food grain stocks will help the country’s economy to stage a sharp V-shaped recovery in 2021-22 as projected by the International Monetary Fund (IMF).
Das took note of the continuing resilience of agriculture and allied activities on the back of all-time highs in the production of food grains, with huge buffer stocks of rice and wheat far in excess of the buffer norms.
He said, over the last three weeks, there have been a few data releases on domestic developments (including on factory output), but they are too disjointed to allow a comprehensive assessment of the state of the economy.
The RBI Governor added that by April 10, pre-monsoon kharif sowing had begun strongly, with acreage of paddy up by 37 per cent in comparison with the last season.
He further maintained that states such as West Bengal, Telangana, Odisha, Assam, Karnataka and Chhattisgarh are leading in sowing activity despite the lockdown.
Tag: RBI
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RBI Governor lauds Chhattisgarh for registering robust economic growth despite nationwide lockdown : Appreciates fast pace of work in agricultural and allied activities
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Autonomy of RBI essential, nurtured by govt: FinMin
Amid reports of its mounting tension with the RBI, the Finance Ministry Wednesday said the government has “nurtured and respected” autonomy of the central bank and has been holding extensive consultations with it on many issues.
“The autonomy for the central bank, within the framework of the RBI Act, is an essential and accepted governance requirement. Government of India has nurtured and respected this,” it said in a statement.
Both the government and RBI, in their functioning, have to be guided by public interest and the requirement of the Indian economy, it said. “For the purpose, extensive consultations on several issues take place between the government and the RBI from time to time.”
However, the statement did not mention about the government citing the never-before-used power of issuing directions under the Act to RBI Governor to seek a resolution to differences with the central bank.
The government has sent at least three letters on different issues under Section 7 (1) of the Reserve Bank of India Act that gives it powers to issue any direction to the central bank governor on matters of public interest.
“The government of India has never made public the subject matter of those consultations. Only the final decisions taken are communicated,” the statement said.
“The government, through these consultations, places its assessment on issues and suggests possible solutions. The government will continue to do so,” it added.
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RBI looked the other way when banks lent freely, ran up NPAs: Jaitley
Finance Minister Arun Jaitley on Tuesday held the central bank responsible for the mountain of bad loans, saying the Reserve Bank looked the other way when banks lent indiscriminately during 2008-14 to keep the economy humming.
Jaitley’s comments reflect a growing tension between the RBI and the government, days after the central bank Deputy Governor Viral Acharya made a bold pitch for autonomy and independence in the banking regulator’s functioning.
The Finance Minister said that after the global financial crisis in 2008 and until 2014, banks were told to open their doors and lend indiscriminately to keep the economy going “artificially”.
“The central bank looked the other way (when) there was indiscriminate lending… Total bank credit in India from Rs 18 lakh crore in 2008 went up to Rs 55 lakh crore by 2014. And this was something that banks couldn’t sustain, the borrowers couldn’t sustain and you had the NPA problem,” Jaitley said at an event.
“I am suprised that at that time, the government looked the other way, the banks looked the other way. I don’t know what the central bank was doing. It was a regulator of these. They kept pushing the truth below the carpet,” he said.
“And we were told that the total NPA (non-performing assets) was Rs 2.5 lakh crore. But when we did the asset quality review in 2015, with the central bank doing it, we found that the NPA was already Rs 8.5 lakh crore,” he added.
At a lecture on October 26 in Mumbai, Acharya stressed the need for independence in the central bank’s functioning, saying that the market can make the government pay for eroding the bank’s independence.