Mumbai, November 16, : , Shaktikanta Das, Governor of Reserve Bank of India said Tuesday that festive season has prompted strong consumption demand. Speaking at the eighth SBI Banking & Economics Conclave, he said: “There are signs that consumption demand triggered by the festive season is making a strong comeback.”.He spoke at the 8th SBI Banking & Economics Conclave and said that there are indications that the festive season has boosted consumption.
“This would encourage firms to expand capacity and boost employment and investment amidst congenial financial conditions.”.This would stimulate firms to increase capacity, boost investment and employment in congenial financial circumstances.”
According to Das, the recent cut in excise duty on petrol and diesel by the Centre and in value-added tax (VAT) by several state governments will augment purchasing power of people, which in turn, will create space for additional consumption.Das claims that the Centre’s recent reduction in petrol and diesel excise duties and the value-added taxes (VAT), by several states, will increase the purchasing power of individuals, which will in turn create more consumption.
Besides, he said that while it is “heartening to note” that the economy is gradually getting back on its feet after a devastating second wave, recovery has progressed in an uneven manner.
He also stated that it was “heartening” to see that recovery is slowly taking place after the second devastating wave.However, this has not been the case for all.
“Contact-intensive services are still to regain the lost capacity despite rapid improvement in the recent period.”Contact-intensive services still need to recover the lost capacity, despite the rapid improvements in recent years.The Q1: 2021-22 data on GDP revealed that there still exists significant gap in both private consumption and investment, relative to their pre-pandemic levels in 2019-20.”.Data on GDP Q1-2021-22 revealed that private consumption and investments are still at a significant deficit relative to pre-pandemic levels for 2019-20.
“So, while the economy is picking up pace, it is yet to cover a lot of ground before it gets broad-based and entrenched.
So, although the economy has picked up speed, there is still a lot to go before it becomes broad-based, stable, and established.This points to the need for sustained impetus so that growth could return to, or better still, exceed the pre-pandemic trend.”.The need for continued impetus is essential to ensure growth can return to or even exceed pre-pandemic levels.
Furthermore, he said India has potential to grow at a reasonably high pace in the post-pandemic scenario.He also stated that India’s potential for growth in the post-pandemic period is high.
“Several factors are stacked in India’s favour.India has many advantages.First, India as an emerging market and developing economy has significant potential to catch up with the rest of the world supported by favourable demographics, improving skill base and strong domestic demand.”.India, as an emerging market, has the potential to catch up to the rest of the globe.This is due to its favorable demographics and improving skills base.Strong domestic demand also helps.
“Second, the Government is providing necessary support – especially through capital expenditure and reforms in various sectors like infrastructure, manufacturing and telecom, apart from other institutional changes to boost productivity, ease supply constraints and improve business environment.”.”Second: The Government provides necessary support, especially through capital expenditures and reforms across various sectors such as infrastructure and manufacturing, along with other institutional changes that boost productivity, reduce supply constraints, and improve the business environment.”
“Third, the pandemic has opened new opportunities of growth in digital and green technology and also on account of resetting of global supply chains that could be advantageous to India.Third, India’s pandemic opened up new growth opportunities in digital and green tech and on account of the resetting global supply chains which could benefit India.Fourth, exports have been a bright spot during the recent months and are likely to benefit further from global economic recovery.”.The fourth is that exports are a shining spot in recent months, and will likely benefit more from the global economic recovery.
In the presence of such enabling conditions and supportive policies, he said that India has a unique opportunity to step up growth and emerge from the pandemic.
He said India is in a unique position to grow and overcome the pandemic because of the supportive policies and enabling environment.
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