The Reserve Bank of India (RBI) on Thursday pegged India's GDP growth forecast for FY22 at 10.5%. The Central Bank's Monetary Policy Committee (MPC) had projected this estimate during its policy announcement in April.
The central bank's governor Shaktikanta Das said that there is no reason for the RBI to revise the GDP growth projection downwards.
"The GDP growth rate projected by RBI for FY22 is 10.5 percent. I don't see any reason to revise the growth projection downwards," Das said while addressing the Economic Times Financial Inclusion Summit on Thursday.
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He further stated that India's financial system will have a critical role to play in fulfilling the aspirations and needs of the economy on the road to recovery.
Das said in India, the second wave of the pandemic has taken a grievous toll both in terms of lives and livelihood. The recovery that had commenced in the second half of 2020-21 was dented by the second wave of the pandemic in April-May 2021.
"Our efforts towards financial inclusion, have helped in enabling the Government to provide seamless and timely financial support to vulnerable sections through direct benefit transfers (DBT)," he added.
Talking about the steps RBI has taken to mitigate the financial impact of COVID-19 related disruptions, Das said the central bank has undertaken several policy measures to ease the flow of credit at a lower cost to needy segments.
These steps, he elaborated, comprised lowering of the policy rate, launching of on-tap liquidity schemes and channelising of liquidity through All India Financial Institutions, and facilitating financial institutions to resolve stressed loans to individuals, small businesses, and MSMEs.
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Das stated that in order to have a planned and structured approach to financial inclusion, banks have been advised by RBI to put in place financial inclusion plans (FIPs) consisting of achievements against several parameters.
"Substantial progress has been made with respect to these parameters, details of which are given in the Reserve Bank's Annual Report released in May 2021," he noted.
Lauding India's digital ecosystem, the RBI governor said that services such as Immediate Payment Service (IMPS), and Unified Payment Interface (UPI) saw transactions worth Rs 4.5 lakh crore per day in June itself.
"Financial inclusion is a key driver of sustained and balanced economic growth which helps reduce income inequality and poverty," Das stated.
As per a report by ratings agency ICRA, India's economic recovery has gained momentum following the lifting of localised lockdowns imposed in wake of the COVID-19 second wave, but is "incomplete."
The economy will see a double-digit growth for the April-June period due to the low base of 2020-21 but will still be short of the Q1FY20 levels, it noted.