Our Spl Correspondent /
Reserve Bank of India, RBI Governor Raghuram Rajan has said that despite immense efforts by the government and the apex bank, the stability of Indian economy is still a work in progress.
In an overview to the annual report for the year 2014-15 released by the RBI today, Rajan said, economic growth is still below levels that India is capable of. He said that inflation is still on the higher side and the willingness of banks to cut base rates is muted.
The report says that uncertainty in the progress and distribution of monsoon continues to be a risk for both growth as well as the inflation outlook. RBI has said that it is closely monitoring the overall disinflation strategy that requires inflation to be brought down to 5 per cent by January 2017.
Dr. Rajan said RBI will continue to remain focussed on bringing down inflation and work with the government and banks to resolve the issue of distressed projects and clean up bank balance sheets so as to support new lending.
RBI Governor has said that the focus is on getting the underlying real projects back on track; while also keeping a check on the progress of current projects.
He said the RBI has created a database of loans of over 50 million and advised banks and NBFCs to report regularly on the status of the loans.
RBI has welcomed the Government’s decision to add to the recapitalisation fund for banks as it will help in cleaning up balance sheets and generating healthy growth.
The RBI report has said that with a surplus expected on trade in services from software exports and travel earnings, the current account deficit for the year as a whole should be contained below 1.5 per cent of GDP.