RBI Governor Shaktikanta Das on Monday (July 27) made a strong case for stepping up investments in the infrastructure sector to restart the economy reeling under the impact of the COVID-19 pandemic.
In his address to India Inc at a CII event, Das said both private and public sectors have to play an important role in developing infrastructure that requires huge investments.
The infrastructure space, he said, could act as a force multiplier for the economy, adding that a big push to certain targeted mega projects can “reignite” the economic growth.
Stating that recent agriculture reforms have opened up new opportunities, the RBI Governor said the sector is emerging as a bright spot and “fortune is shifting in favour of the farm sector in the economy”.
He noted that 1 per cent increase in global value chain participation can boost per capita income level of a country by more than 1 per cent.
The central bank Governor further said that it may be necessary to focus on greater strategic trade integration, including in the form of early completion of free trade agreements with the US, EU and the UK.
With regard to forex rate, Das said the RBI has no fixed target for the rupee but will monitor undue volatility.
The RBI Governor assured the industry that the central bank will not hesitate to take steps as and when required amid challenges and will remain extremely vigilant.
He said that various liquidity measures taken by the central bank have revived the corporate bond market.
Corporate bond issuance has touched ₹1 lakh crore in the first quarter, much higher than the same period a year ago, Das said.
The RBI Governor said he has advised banks to undertake a stress test and raise capital proactively to meet challenges.