Giving the government full credit for the faster-than-expected economic recovery, Das said the central bank had only supported the government in reviving the pandemic-ravaged economy.
Citing a series of measures the government has taken since the pandemic hit in March 2020, the governor specifically mentioned fuel tax cuts, the tax resolution for the telecommunications sector, the cancellation of tax legislation. retroactive, the sale of Air India, the plan to sell part of the public sector banks and the PLI regime as the main reforms and growth engines bearing fruit now.
âWhile soaring world crude prices and many geopolitical issues and other global headwinds are challenges for growth, the overall growth outlook is very positive for us. I am very confident that our GDP will comfortably grow 9.5 percent this fiscal year because all of the growth impulses are very strong, and the fast-moving indicators are stronger.
“Our assessment is that we are on track to comfortably achieve 9.5% growth,” Das said at a function hosted by the financial daily Business Standard here tonight.
But there are headwinds around the world, as advanced economies, which recovered from the pandemic faster and had higher growth figures earlier, appear to have moderated now, he noted. , putting question marks on the forecast of 5.9% of global GDP.
Considering all of these factors, global GDP could be below the target of 5.9% due to shortages of semiconductors, shipping containers and the resulting spike in freight rates, among others.
But on top of all that, many European, Asian and American countries are still battling the pandemic, Das said, warning “this should ensure there is no room for complacency.”
He also based his growth optimism on indications from bankers that investment loans are making a slow return and will pick up steam from the next fiscal year.
Our recent interaction with bank CEOs makes me confident that demand for investment capital is making a slow return and is expected to gain momentum from the next fiscal year, he said, when asked about his ‘he was concerned that for the first time a retail loan book at Rs 28.58 lakh crore – drawn largely by home loans – topped the corporate loan book by Rs 28.28 lakh crore in July of this year.
Loans will go where there is demand. Right now there is a great demand for home loans for one as we are now with the lowest interest rate regime and plentiful cash flow, and for another many people are looking for more spacious homes due to the pandemic, he said.
It is therefore up to the banks to make a very careful assessment of the risk in terms of sectoral allocation of their assets. Every bank must do due diligence and determine risk appetite, Das noted, parrying a straightforward answer to whether he sees a bubble in retail books.