New Delhi: Reserve Bank Governor Shaktikanta Das said on Monday that structural reforms will have to be used to improve demand and give impetus to a sluggish economy.
He said that the economic growth, which has fallen to a minimum level of 11 years, is now showing early signs of improvement. This improvement in the situation needs to be sustained for a long time.
Das said that every policymaker needs to closely monitor the impact of the corona virus in China so that appropriate measures can be taken accordingly. RBI Governor said that the 2020-21 Budget and recent steps by Finance Minister Nirmala Sitamaran have created a favorable economic environment to bring demand back on track and increase consumption. Now it is necessary that land and labor reforms be taken forward, agricultural marketing should be brought to work and there is an emphasis on skill development.
He said that RBI had felt the slowdown in economic growth in early 2019 and the policy rate was cut five times in a row using the scope created by softening inflation.
Das stated the reasons for the slowdown in the economy, that due to weak demand, as well as uncertainty in global trade and business, the production capacity utilization of prisons is running low. Apart from this, the balance sheet has become a twin problem due to blocked loans of banks and increasing debt burden on companies.
