RBI Governor Shaktikanta Das Highlights 5 Positive Shifts In Economy

The RBI Governor was addressing members of the Confederation of Indian Industry (CII) National Council.

RBI Governor Shaktikanta Das Highlights 5 Positive Shifts In Economy

Shaktikanta Das said the industry will play a pivotal role in what could be known as "silent revolution"

Reserve Bank of India Governor Shaktikanta Das on Monday highlighted five major dynamic shifts in the country that, he said, need to be "converted into structural transformations" and will lead to "sizeable benefits for economy". "The fortunes shifting in favour of the farm sector, the changing energy mix in favour of renewables, leveraging information and communication technology (ICT), and start-ups to power growth, shifts in supply and value chains, both domestic and global, and infrastructure as the force-multiplier for growth" are the five major dynamic shifts underway in the economy, he said.

Here are 10 things to know:

  1. The Indian industry will play a pivotal role in what could be known as "silent revolution", the RBI Governor said in a virtual address to members of the Confederation of Indian Industry (CII) National Council. 

  2. Mr Das said the gap on the infrastructure front remains large, making a strong case for stepping up investments in the sector to revive the economy. He said the country needs $4.5 trillion for investment in Infrastructure by 2030, citing NITI AAYOG estimates. He suggested high speed rail infrastructure projects connecting the length and breadth of the country as a long-term measure to strengthen the sector.

  3. The RBI Governor also pointed out that the coronavirus pandemic has impacted funding for start-ups. The country added seven unicorns in 2019, he said.

  4. "We must fight relentlessly against this invisible enemy," he said, referring to the spread of the coronavirus pandemic which has affected an already-slowing economy.

  5. "Currently, COVID-19 is a compelling theme in all conversations... Questions about flattening of the COVID-19 curve, the arrival of the elusive vaccine, the protection of lives and livelihood, and the shape of economic recovery haunt us day in and day out... There are no credible answers we have to these questions," the RBI Governor said.

  6. Speaking on agriculture, the RBI Governor said the country needs to focus on management of surplus agricultural produce. Three ordinances will lead to major reforms in the agriculture sector, he said.

  7. Mr Das mentioned India's shift to being a power-surplus country owing to developments in the renewable energy segment. The share of renewable energy in country's total installed capacity increased from 11.8 per cent in March 2015 to 23.4 per cent by March 2020, the RBI chief pointed out.

  8. Mr Das' comments came days after a report released by the central bank stated that non-performing assets or bad loans in the country's banking sector could rise to as much as 15 per cent of total loans by March 2021. 

  9. RBI Governor refused to comment on the loan moratorium brought in by the RBI due to the COVID-19. Responding to a suggestion by HDFC chairman Deepak Parekh against extending the loan moratorium, Mr Das said: "I have noted the suggestion. I will not be able to comment on them now."

  10. Meanwhile, total COVID-19 cases in India touched 1.44 million by Monday morning, according to government data.