RBI Governor Shaktikanta Das: Reserve Bank of India (RBI) has again cut the repo rate, reverse repo rate, and interest rate amidst the battle with Coronavirus. Not only this, RBI Governor Shaktikanta Das, during a media briefing today (Friday), said that the gross domestic product (GDP) could go negative in 2020-21. He said, “GDP growth is projected to be negative in 2020-21.
Monsoon is expected to be normal. The rise in the price of pulses is a matter of concern. Everyone will benefit from agricultural production. According to the WTO, global trade may decline from 13 to 32 percent
He further said, ‘Repo rate is being reduced. The RBI has cut 40 basis points. Now the repo rate is four percent. The outlook for inflation is highly uncertain. The RBI has reduced the reverse repo rate to 3.35 percent. It is expected that fiscal and administrative measures will gain momentum in the second half of 2020-21. With the reduction in repo rate, it is expected that loans can now be cheap.
The governor said, ‘The six-member Monetary Policy Committee voted in favor of a 0.40 percent reduction in the interest rate by 5: 1. Demand in India is declining, electricity, petroleum product consumption is declining, private consumption is declining. Private consumption has suffered the most due to the outbreak of COVID-19. Investment demand has stopped. The revenue of the government has been badly affected due to sluggish economic activity amid the outbreak of Corona.
During the corona crisis, PM Narendra Modi announced a relief package of 20 lakh crores. Finance Minister Nirmala Sitharaman held a five-day press conference to give detailed information about the package. The finance minister had said that amid the coronavirus epidemic, it was announced by PM Modi that a package of Rs 20 lakh crore will help in reviving the economy.
He said, ‘This package will have a multiplier effect. The promotion of the business sector by the government was important. In the PM Garib Kalyan Yojana, we have made some cash transfers, we are not closing this option at the moment. This scheme has been launched after lockdown. Promoting businesses is important to resume economic recovery.
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