Shaktikanta Das, Governor, Reserve Bank of India (RBI) emphasized that India has tremendous potential and it will certainly bounce back. "We all need to act together and act in time," he said. Addressing FICCI's National Executive Committee Meeting (NECM), Mr Das said, "The enabling policy environment would evolve around the initiatives taken by India's businesses to seize these opportunities and actualize the potential of the Indian economy as a rising economic power of the 21st century."
He also outlined key areas which can help India to propel. "India has tremendous scope to capitalize on the new opportunities. The 5 areas that will determine our ability to sustain India's growth in the medium-term include Human Capital in education and health, Productivity, Exports, Tourism and Food processing," he added. Mr Das said that by all indications, the recovery is likely to be gradual as efforts towards the reopening of the economy are confronted with rising infections. He further urged the industry to play an active role by investing more in the R&D. "Government, private sector must work together to enter the global value chain," he emphasized
The RBI Governor said that India needs to move up on global agriculture value chain. Despite being one of the largest food producers, India's position in the global value chain is quite low. He further added that food processing is a sunrise industry for India. Mr Das said that the tourism and hospitality sector has been impacted more by COVID but also expressed hope for early revival. "Tourism as an engine of growth and pent up demand could drive a V-shaped recovery. Employment elasticity for the tourism sector is also quite high," added Mr Das.
He further said that among the sunrise sectors that offer potential for higher exports in the post-COVID period are drugs and pharmaceuticals. "A sharp policy focus on other global value chain intensive network products, including equipment for IT hardware, electrical appliances, electronics, telecommunications, and automobiles would also provide the cutting edge to India's export strategy with considerable scope for higher value additions," Mr Das added.
The Governor said that the immediate policy response to COVID in India has been to prioritize stabilization of the economy and support a quick recovery. He also stated that with a view to further promoting innovations in financial services, RBI has announced an Innovation Hub. "This will focus on new capabilities in financial products and services that can help in deepening financial inclusion and efficient banking services," he noted.
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