The Reserve Bank of India is focused on making sure that the fiscal stimulus to growth and renewed private sector investment proceed hand in hand and this augurs well for India's return to a high-growth path, a top banker said.
The strong commitment to managing the government borrowing programme in a manner that is non-disruptive to markets and does not crowd out private sector investment should give confidence to market participants, ICICI bank's managing director & CEO, Chanda Kochhar, said.
The banker was commenting on the Reserve Bank's first-quarter review of its monetary policy announced on Tuesday.
The fact that two-thirds of the programme will be completed in the first-half of the year would support the ability of the system to meet the expected growth in credit offtake in the second-half, Kochhar said.
The RBI has noted the signs of stability in the global economic environment, rightly concluding that these indicate an easing of the pace of deterioration and return to growth is some way away, she said.
The policy statement reiterates the structural advantages of the Indian economy--strong domestic demand, high savings rate and robust financial sector," Kochhar said.
RBI has stated its expectation of 19 per cent bank deposit growth. At the same time, the policy notes the challenges arising out of transmission of the global financial crisis, particularly through the impact on exports.
"Taking all these factors into account, the RBI has stated that its growth projections of 6 per cent for the Indian economy has an upward bias," she said.
Image: Chanda Kochhar
