RBI Monetary Policy Review: In chat with Anil Singhvi, Ajay Bagga reveals what he liked about June 2021 announcements; shares his disappointments too

RBI Monetary Policy Review: Expert Ajay Bagga said that there is clarity on inflation and Gross Domestic Product (GDP) growth in the Monetary Policy announcements by the Reserve Bank of India (RBI) Governor Shaktikanta Das. In a chat with Zee Business Managing Editor Anil Singhvi, Bagga said that as a thumb rule one must consider a 1 per cent GDP fall from the day of lockdowns.  

He said that since the lockdown has been for three-months the GDP numbers for FY22 are heading towards 8 per cent.

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He, however, said that the stock markets have been disappointed.

Though GSAP 2 was announced, he said that he was expecting more since the Government has indicated borrowing of 1.58 lakh cr to give GST compensation to states.

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#RBICreditPolicy | जानिए अजय बग्गा को क्रेडिट पॉलिसी में क्या आया पसंद? क्या इन्फ्लेशन और GDP ग्रोथ को लेकर मिली क्लैरिटी?#RBI #CreditPolicy #ShaktikantaDas @AnilSinghvi_ @Ajay_Bagga pic.twitter.com/GAEXclB1JU

— Zee Business (@ZeeBusiness) June 4, 2021

He also said that the stock markets were also disappointed as the announcements had nothing on loan moratorium. There was an expectation that the RBI would bring a restructuring package for big businesses who have been hit die to the pandemic, Bagga said.

The restructuring framework announced on 5th may by RBI has been increased from Rs 25 cr to Rs 50 cr for MSMEs, non-MSME small businesses and loans to individuals for business purposes.

He said that the fall in Wave 2 is not as severe as Wave 1 and the GDP in this quarter is expected to fall by 3-5 per cent as against the 24 per cent fall in the April to June 2020 quarter.

He also highlighted how savings of the poor have deteriorated because of the onslaught of pandemic and the sufferings are so widespread that only a fiscal package will be able to do the trick. The government will have to take this measure and not much could be done by the Central Bank.

He lauded the efforts of RBI saying that it has managed liquidity in the system, kept low-interest rates and also managed Government borrowings.