RBI's direct support to healthcare sector will generate total output demand of Rs 80,000 crore: SBI Research
The macro impact of the scheme can be gauged from the fact that Rs 50,000 crore is roughly 9% of India's total health expenditure of Rs 6 lakh crore under private final consumption expenditure in 2019-20, according to SBI Ecowrap
- May 6, 2021,
- Updated May 6, 2021 1:39 PM IST
Recent measures unveiled by the Reserve Bank of India (RBI), including the announcement of a Rs 50,000 crore special liquidity window to address the needs of the healthcare sector, will go a long way in supporting it, according to SBI's Research report.
The report said the macro impact of the scheme can be gauged from the fact that "Rs 50,000 crore is roughly 9% of India's total health expenditure of Rs 6 lakh crore under private final consumption expenditure in 2019-20."
It further added that a direct support to the sector will generate "total output demand of roughly Rs 80,000 crore."
The SBI report, however, expects that "banks are unlikely to use such provisions as banks' provisioning coverage ratio is already close to 85% on Dec'20."
It added that the last tranche of 0.625% of the Capital Conservation Buffer has already been deferred from September 30, 2020, to October 1, 2021, easing a capital requirement of around Rs 65,000 crore at system level.
To support the states, the RBI has already enhanced the Ways and Means limit from a recommended ?47,010 crore to ?51,560 crore for all states/ UTs and this shall continue for six months i.e., up to September 30, 2021. Also, the number of days for which a State/ UT can be in overdraft in a quarter has been increased to 50 working days from the current stipulation of 36 working days.
"With varying degrees of stress in states' finances due to COVID-19, these moves will provide states with the succour to manage their borrowings," the report added.
Recent measures unveiled by the Reserve Bank of India (RBI), including the announcement of a Rs 50,000 crore special liquidity window to address the needs of the healthcare sector, will go a long way in supporting it, according to SBI's Research report.
The report said the macro impact of the scheme can be gauged from the fact that "Rs 50,000 crore is roughly 9% of India's total health expenditure of Rs 6 lakh crore under private final consumption expenditure in 2019-20."
It further added that a direct support to the sector will generate "total output demand of roughly Rs 80,000 crore."
The SBI report, however, expects that "banks are unlikely to use such provisions as banks' provisioning coverage ratio is already close to 85% on Dec'20."
It added that the last tranche of 0.625% of the Capital Conservation Buffer has already been deferred from September 30, 2020, to October 1, 2021, easing a capital requirement of around Rs 65,000 crore at system level.
To support the states, the RBI has already enhanced the Ways and Means limit from a recommended ?47,010 crore to ?51,560 crore for all states/ UTs and this shall continue for six months i.e., up to September 30, 2021. Also, the number of days for which a State/ UT can be in overdraft in a quarter has been increased to 50 working days from the current stipulation of 36 working days.
"With varying degrees of stress in states' finances due to COVID-19, these moves will provide states with the succour to manage their borrowings," the report added.