New Delhi: The continuation of the Reserve Bank of India’s (RBI) accommodative stance is welcome. The statement does allude to a withdrawal of accommodation clearly signalling towards normalization of liquidity management to ensure inflation remains within target, said Sanjiv Mehta, president, FICCI.

“There has been a considerable change in the economic scenario since the last policy announcement and we were expecting that the Central Bank will take due cognizance of the current situation. The significant escalation in geo-political stress since end February 2022 is undermining global recovery and some impact on India will be inevitable.”

“The Reserve Bank of India has revised down India’s GDP growth estimate for 2022-23 to 7.2 per cent. It is a significant downward revision from its earlier projection of 7.8 per cent and also lower than 7.4 per cent GDP growth estimate put forth by FICCI’s latest Economic Outlook Survey. Inflationary pressures remain on fore, and we saw this getting reflected in the upward revision in inflation forecast for the current year. However, inflation in India is supply side driven, and we feel support from the government in terms of fiscal measures such as reduction in excise duty and VAT on petrol and diesel by the Centre and the States can help mitigate immediate concern on inflation to some extent,” added Mr Mehta.

“Moreover, we are glad to note that the Reserve Bank of India has extended the applicability of rationalized risk weights for all new housing loans to March 31, 2023, from March 31, 2022. The housing and real estate sector can be a force multiplier for growth and for kick starting investments as these sectors have significant forward and backward linkages,” added Mehta.

“We also look forward to the RBI discussion paper on climate risk and sustainable finance and will provide our perspective on the same once it is put out for public comments,” said Mehta, adding that finally, with digital payments on the rise, there was a felt need to focus even more on the cyber security aspects related to digital payments. In this context, RBI’s announcement that it would issue detailed guidelines on cyber resilience and payment security controls for payment system operators is timely. /BI/