Reserve Bank of India Governor Shaktikanta Das, during a keynote address at 48th AIMA National Management Convention today, said that while the Covid-19 pandemic has created enormous challenges, it can also act as an inflection point to alter the course of development.
The Governor said India needs a big infrastructure push, particularly in areas of health, education, low carbon and digital economy in addition to transport and communication.
He said Covid-19 has induced several structural changes, significantly altering the way people work, live and organise businesses. "With a greater shift to work from home, technology has gained the potential to boost productivity, by saving on travel time, boosting sales on online platforms and accelerating the pace of automation."
He said consumption pattern is also changing, and companies are resetting their supply chains, both globally as well as locally. All these changes will have wider ramifications for the economy, Das said.
The RBI Governor said enhanced adoption of technology will give impetus to productivity, growth and income. "Leveraging technology in implementing government schemes, training and skill development programmes for the unemployed, promoting women-friendly work atmosphere and supporting the education of the poor and marginalised sections would be areas of focus as we embark on our journey beyond COVID-19," he added.
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Das said income and job creation with digitalisation and innovation can bring about a new age of prosperity for a large number of people. He said e-commerce is emerging as another promising sector in India, given an increased penetration of the internet and smartphone.
Das said India's energy sector is also witnessing significant churning and technological transformation. "Currently, a large part of the energy demand is met from fossil fuels, with significant import dependence. India aims to increase the share of non-fossil fuels to 40 per cent (450GW) of total electricity generation capacity by 2030, as part of the goals set under the Paris agreement," he added.The RBI Governor said a dynamic and resilient financial system is at the root of a stronger economy. "India's financial system has transformed rapidly to support the growing needs of the economy. While banks have been the primary channels of credit in the economy, recent trends suggest an increasing role of non-bank funding channels," he added.
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In the post-pandemic period, global trade will remain vital for faster recovery, he said. "Reflecting congenial policy environment and supportive external demand, India's exports have rebounded, with a broad-based double-digit growth during the first half of 2021-22," he said.
He said the global recovery has also been uneven across countries and sectors. "Advanced economies have normalised faster on the back of higher pace of vaccination and larger policy support. Emerging and developing economies are lagging due to slow access to vaccines and binding constraints on policy support," Das said, adding that multilateralism will lose credibility if the world fails to ensure equitable access to vaccines across countries.
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