GDP Growth Projection: RBI Governor Shaktikanta Das has also predicted an increase in the GDP growth rate by 0.1 percent in the third quarter of the current financial year and 0.7 percent in the fourth quarter. The RBI governor said that the economy is expected to get strengthened due to increase in demand in rural areas.
Mumbai: The Reserve Bank of India has raised therevised estimate ofreal GDP growth by 7.5%for the year 2020-21. Earlier this estimate was expressed near -9.5 percent. RBI Governor Shaktikant Das announced this in an online briefing after the meeting of the Monetary Policy Committee (MPC). In the monetary policy review presented in October, the Reserve Bank said that the GDP growth rate is expected to fall by 9.5 per cent in the financial year 2020-21. That is, the Reserve Bank has predicted a fast recovery of two percent in three months.
The RBI governor has assured that the economy will see positive GDP growth in the second half of the current financial year 2020-21. This revised estimate of the RBI has been made on the basis of the slight acceleration in the economy and the decision to adopt an “accommodative” policy in the economy in the fifth bi-monthly monetary policy meeting of FY21.
RBI Governor Shaktikanta Das in the online briefing also forecast a 0.1 percent increase in GDP growth rate in the third quarter of the current financial year and 0.7 percent in the fourth quarter. The RBI governor said that the economy is expected to get strengthened due to increase in demand in rural areas. He said that there has been a spurt in demand in urban areas.
The RBI has not made any changes in key policy rates amid the deterioration in the economy amid the corona virus epidemic. In its monetary policy committee meeting, the central bank has decided to keep the repo rate at 4 per cent. For the third consecutive time the repo rate has been kept at the current level. Given the high level of inflation and the fall in GDP, many economists had already predicted the repo rate to be maintained at the current level.
The Reserve Bank has also kept the Reverse Repo Rate at the former level of 3.35 percent. The central bank has maintained a “liberal” approach to the policy. Since May, the RBI has kept the repo rate i.e. the rate at which RBI gives loans to banks at 4 percent. This is a 19-year low.