RBI Governor’s announcement commendable, Senior Economist Brinda Jagirdar tells Anil Singhvi

Senior Economist Brinda Jagirdar on Wednesday lauded the announcements made by the Reserve Bank of India (RBI) Governor Shaktikanta Das aimed at helping businessmen and institutions deal with the surge in Coronavirus cases across the country. She said that all the measures announced by Das were commendable and timely.  

She said that this time the focus of the Governor’s speech was not on big corporates but on small businesses, MSMEs and individuals. She said that these are the segments which have been significantly hit by the Covid 19 onslaught.

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On Wednesday, RBI Governor announced a Rs 50,000 cr package for emergency health services. The central bank has also provided an on-tap term liquidity of Rs 50,000 cr till March 2022. 

The banks have also been allowed to create a corona-related loan book. 

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RBI के फैसले प्रशंसनीय और सही समय पर लिए गए हैं। सबसे महत्वपूर्ण बात यह है कि गवर्नर का फोकस छोटे कारोबार, MSME और इंडिविजुअल पर था: बृंदा जागीरदार, सीनियर इकोनोमिस्ट #RBI #ShaktikantaDas @RBI @AnilSinghvi_ pic.twitter.com/ImAnwWAhrK

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She further said that this time the adverse impact of the pandemic on growth will not be so severe.  

Jagirdar however, emphasised on the need to remain cautious as inflation was still above 5 per cent.  

She said that the announcement of Rs 50,000 cr for emergency health services was a very good step. 

She also praised the step related to corona loans where the banks would get a 0.4 per cent rebate on reverse repo rate.  

Small Finance Banks and lenders for MFI (Microfinance Institutions) will now be considered under the priority sector lending, which is a good step, she further said.   

Among other things, the RBI has asked banks on Wednesday to let certain borrowers have more time to repay loans, among other support measures, amid a major second wave of COVID-19 infections in the country that has led to strict lockdowns in several states. 

The moratorium will be available to individuals and small and medium enterprises that have not restructured their loans in 2020 and were classified as standard accounts till March 2021, RBI Governor Shaktikanta Das told reporters. 

Also, the RBI Governor, Shaktikanta Das, in his speech said, "Indian economy was advantageously poised against other countries at the end of the last fiscal. The situation has done a U-turn and India is fighting against the 2nd wave of Covid-19. Restoring normalcy has become imperative. RBI will deploy all its resources in the services of the nation. The devastating speed of covid-19 pandemic spread has to be matched by relevant steps by the central bank."