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World is emerging from shadow of coronavirus: RBI Governor

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Reserve Bank of India, RBI Governor Shaktikanta Das has said that there are signs that the world is emerging from the shadow of coronavirus. Stating that the pandemic has provided a new impetus to technology-driven companies such as fintech, edtech and healthtech, RBI Governor Shaktikanta Das said the forces of ‘creative destruction’ are expected to boost productivity by encouraging greater competition, dynamism and innovation in several sectors of the economy.
Delivering the keynote address at the 48th National Management Convention of the All India Management Association, Mr. Das said the time is right to plan for an economy which is stronger, more inclusive and sustainable.
Talking about the achievements of India’s manufacturing sector, Mr. Das said the country has turned from being an importer to an exporter of mobile phones. He said the trend is likely to spill over to other sectors also; enhancing India’s share in Global Value Chain and increasing the competitiveness of India’s large and Micro, Small and Medium Enterprises.
He also pointed out the importance of the Production linked incentive (PLI) scheme for India. He said that the scheme is an important initiative to boost the manufacturing sector. “It is necessary that sectors and companies which benefit from the PLI utilise this opportunity to further improve efficiency.
“Das said the global recovery has been uneven across countries and sectors. Advanced economies have normalised faster on the back of a higher pace of vaccination and larger policy support.
However, warning of uneven global recovery, the RBI Governor said multilateralism will lose credibility if it fails to ensure equitable access to vaccines across countries. He added that securing the health and immunity of the poor would mean a great leap towards inclusive growth.
Governor highlighted that a dynamic and resilient financial system is at the root of a stronger economy and India’s financial system has transformed rapidly to support the growing needs of the economy.
“While banks have been the primary channels of credit in the economy, recent trends suggest increasing role of non-bank funding channels. Assets of non-bank financial intermediaries like NBFCs and mutual funds have been growing; funding through market instruments like corporate bonds has also been increasing,” Das said.
According to him this is a sign of a steadily maturing financial system – moving from a bank-dominated financial system to a hybrid one.
Substantial progress has been made to fortify internal defence mechanism of financial institutions to identify, measure and mitigate risks and this is a continuing process and efforts by all stakeholders have to be sustained, Das said.India attracts FDI inflow of 27.37 bn
India has attracted Foreign Direct Investment, FDI inflow of 27.37 billion dollar during first four months of this financial year which is 62 per cent higher as compared to corresponding period last financial year. Commerce and Industry Ministry said, the measures taken by the government on the fronts of FDI policy reforms, investment facilitation and ease of doing business have resulted in increased FDI inflows into the country. The Ministry said, FDI equity inflow also grew by 112 per cent in the first four months of this financial year compared to same period last year.
Automobile Industry’ has emerged as the top sector with 23 per cent share of the total FDI Equity inflow followed by Computer Software and Hardware with 18 per cent and Services Sector 10 per cent.