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Inflation targeting and credit expansion; FM’s post-budget review

Finance Minister to discuss ways to exit the stimulus measures introduced to combat the economic impact of the Covid pandemic in a post-budget review. Discussion was held between FM Nirmala Sitharaman and the Reserve Bank of India’s (RBI’s) board of directors.

Sitharaman revealed the RBI board of directors on the thinking behind her budget for 2021-22. She also told on what basis she prioritised different aspects. The meeting was held via videoconferencing. It included minister of state for finance and corporate affairs Anurag Singh Thakur, finance secretary Ajay Bhushan Pandey and secretary, department of investment and public asset management Tuhin Kanta Pandey.

It is being understood that the two key takeaways from the meeting were inflation targeting and credit expansion. The RBI had introduced policy rate cuts and liquidity infusion, regulatory forbearance and time-bound resolution with additional provisions to ease the economic impact of the pandemic. RBI governor Shaktikanta Das assured that the central bank will support the ?12 lakh crore government borrowing programme in the next financial year in a non-disruptive manner.

The Centre will take necessary actions with regard to credit expansion with the RBI and banks separately. The meeting discussed on ensuring credit to micro, small and medium enterprises, manufacturing and capital raising by banks. Meeting reviewed the present economic situation. It analysed the global and domestic challenges as well.

 

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