RBI projects GDP at 10.5 per cent in 2021-22

The Reserve Bank of India (RBI) has said that the monetary policy review has decided to continue with an accommodative stance of monetary policy to maintain status quo on key policy rates. This will continue as long as necessary at least through the current financial year and into next year to revive growth and mitigate the impact of Covid 19. The repo rate is kept unchanged at 4 percent and the reverse repo rate at 3.35 percent.
While announcing the policy review the RBI governor Shaktikant Das on Friday said in Mumbai that the GDP growth is projected at 10.5 percent in the Financial Year 2021-22. He said projection of CPI inflation has been revised to 5.2 percent for the fourth quarter of the current financial year. He added that  the year 2020 tested the capabilities and endurance, 2021 is setting the stage for a new economic era in the course of our history.Shaktikanta Das said that the normalisation is pickup pace in India as fears of a second wave of the coronavirus abate.  He pointed out that consumer confidence is reviving and business expectations of manufacturing, services and infrastructure remain upbeat. The movement of goods and people and domestic trading activities are growing at a robust pace.

Later, speaking tp media Das said the government and the RBI have discussed the idea of a bad bank and will examine the formal proposal on the ARC once it is made.  He expressed his views about the Asset Reconstruction Company proposed by the Centre during the budget for 2021-22.  He said that the bank is making its own assessment of true state of NPAs in each bank and expressed confidence of managing the borrowing program in a non-disruptive manner. He added that direct retail participation in the bond market is a major structural reform and it is endeavour to make the G-sec market accessible.