TLI Staff
Mumbai: With second wave of pandemic taking heavy toll on the economy, RBI has cut its forecast of real GDP growth at 9.5% in FY22 from 10.5% earlier.
As per the latest RBI estimate, the real GDP growth is expected to be 18.5% in Q1, 7.9% in Q2, 7.2% in Q3 and 6.6% in Q4.
Explaining the basis for this, RBI Governor Shaktikanta Das noted that unlike the first wave, impact on economic activity is expected to be relatively contained in the second wave, with restrictions on mobility being regionalised and nuanced.
On expected lines, the central bank kept interest rates unchanged while maintaining an accommodative stance to revive and sustain growth on a sustainable basis. The Marginal Standing Facility (MSF) rate and bank rates remain unchanged at 4.25%. Reverse repo rate also remains unchanged.
The RBI Governor informed that Monetary Policy Committee was of the view that policy support from all sides is required to gain growth momentum and to nurture recovery after it takes root.
“Hence policy rate has been left unchanged and accommodative stance has been decided to be continued as long as necessary to revive and sustain growth, while ensuring inflation remains within target” the Governor said while delivering RBI’s bi-monthly monetary policy statement.
The Governor announced a set of measures to revive the economy and support crisis-hit sectors like hospitality and MSMEs.
He announced an On-Tap Liquidity Window of Rs 15,000 crore for Contact-Intensive sectors. The window will be open till March 31, 2022 with tenures up to three years at the repo rate.
Under this scheme, banks can give fresh lending support to hotels, restaurants, travel agents, tour operators, aviation ancillary services and other services including private bus operators, rent-a-car service providers, event organizers, spa clinics, beauty parlours and saloons.
In order to further support credit requirements of MSMEs including those in credit-deficient and aspirational districts, Special Liquidity Facility of Rs 16,000 crore to SIDBI was proposed. The loans would be provided at 4% for a period of up to one year.
The RBI also expanded the coverage of borrowers under Stress Resolution Framework 2.0 by enhancing maximum aggregate exposure threshold from Rs 25 crore to Rs 50 crore for MSMEs, non-MSME small businesses and loans to individuals for business purposes.