RBI credit policy strikes a fine balance between inflation taming and sustainable growth: ASSOCHAM

Welcoming the RBI’s decision to maintain the accommodative policy Repo rate of four per cent, ASSOCHAM today said, the Monetary Policy Committee has struck a fine  balance with a nuanced approach to encourage growth while  calibrating  inflationary pressures and defend  the Indian economy by navigating the current geo-political  storm with resolute response.
  ” The best thing about the Credit Policy review by the MPC  is that the RBI is continuously trying  various monetary tools to face the unfolding global challenges of elevated commodity and crude prices to limit the inflationary impact on the Indian economy without giving any jerk to a growth trajectory which is on a steady upward move,” ASSOCHAM Secretary General Mr Deepak Sood.
  He said,  Governor Mr Shaktikanta Das must be complimented for the way the RBI has helped the Indian economy sail through the last two years marked by an unprecedented global pandemic. ”Together with the Finance Ministry, the RBI held its ground of maintaining the accommodative interest rates, helping the country deal with the problem of the ‘twin balance sheet’. We are largely through this issue with the balance sheets of the banks and corporations looking a lot better. RBI and fiscal authorities deserve to be congratulated for the same”.
  Mr Sood said now that the new challenge of global inflation and heightening of interest rates has resurfaced, the RBI has chosen a pragmatic path of gradual  withdrawal of extra liquidity in the system, which was necessitated by the outbreak of the Covid 19 pandemic. Even the bias towards inflation taming is being done by protecting growth so that a sustainable economic expansion is ensured. One of the key highlights of the policy is to help the government with its borrowing programme for FY’ 23 so that the government continues to lead the economic growth , to be followed by private consumption and investment.
The ASSOCHAM Secretary General said RBI’s latest growth projection of 7.2 per cent and inflation forecast of 5.7 per cent for the current financial year have to be understood in the backdrop of uncertainty in the global economy and a continuing Ukraine-Russia war disrupting the supply chain. So far, India has managed the fast evolving situation with a lot of maturity, courage and policy support.
The chamber noted that the decision to continue with a liberalised risk weightage for individual housing loans by banks till March 31,2023 is a major positive for the housing sector. Measures like interoperable card-less cash withdrawals at the bank ATMs would enhance cyber security. Similarly, move towards improvement in customer service by banks through RBI guidelines would help both banks and customers.

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