{"id":24664,"date":"2025-02-21T10:52:06","date_gmt":"2025-02-21T05:52:06","guid":{"rendered":"https:\/\/bigbreakingwire.in\/?p=24664"},"modified":"2025-02-21T11:22:09","modified_gmt":"2025-02-21T05:52:09","slug":"rbi-sees-indias-economic-recovery-strengthening-amid-policy-support","status":"publish","type":"post","link":"https:\/\/bigbreakingwire.in\/rbi-sees-indias-economic-recovery-strengthening-amid-policy-support\/","title":{"rendered":"RBI Sees India\u2019s Economic Recovery Strengthening Amid Policy Support"},"content":{"rendered":"
<\/div>\n

India\u2019s economy has regained its lost momentum, and consumption demand is expected to improve due to easing inflation and tax benefits, according to the Reserve Bank of India\u2019s latest monthly bulletin. The central bank highlighted that government policies and fiscal strategies are playing a key role in sustaining growth while ensuring financial stability.<\/p>\n\n\n\n

\"\"
X\/BigBreakingWire<\/a> <\/figcaption><\/figure>\n\n\n\n

Fiscal Policy Balances Growth and Stability<\/strong><\/p>\n\n\n\n

RBI noted that the government\u2019s budget successfully balances the need for fiscal consolidation with economic expansion. A strong emphasis on capital expenditure, combined with measures to boost consumption, is expected to accelerate growth. In particular, tax relief and increased infrastructure spending are likely to enhance disposable incomes and support demand.<\/p>\n\n\n\n

Rising Consumption and Rural-Urban Demand<\/strong><\/p>\n\n\n\n

Both rural and urban consumption are poised for recovery. In rural areas, the robust performance of the agriculture sector is expected to drive demand, while urban spending is likely to improve due to higher disposable incomes and tax concessions. These factors could lead to a broad-based pickup in economic activity, supporting overall growth.<\/p>\n\n\n\n

Liquidity Challenges in the Banking System<\/strong><\/p>\n\n\n\n

On financial liquidity, the RBI pointed out that while several measures have been introduced\u2014such as open market operations and variable rate repo auctions\u2014to inject funds into the system, liquidity remains unevenly distributed. Despite an overall liquidity deficit, some banks continue to park funds under the standing deposit facility instead of lending in the uncollateralized call money market, reflecting hesitancy in interbank lending.<\/p>\n\n\n\n

\"\"
X\/BigBreakingWire<\/a><\/figcaption><\/figure>\n\n\n\n

Global Economic Risks and Inflation Concerns<\/strong><\/p>\n\n\n\n

The RBI also warned that global trade policies could add to inflationary pressures and create market turbulence. The final phase of bringing inflation under control may prove difficult in such an environment, possibly requiring central banks to adjust their policies. Given these uncertainties, India\u2019s central bank remains watchful, prepared to take necessary steps to maintain economic stability.
<\/p>\n\n\n\n

RBI Injects \u20b943.2 Lakh Crore to Boost Liquidity Under Sanjay Malhotra<\/strong>
<\/p>\n\n\n\n

Since Sanjay Malhotra took charge, the Reserve Bank of India has infused \u20b943.2 lakh crore into the banking system to improve liquidity, as per RBI data. This includes \u20b916.4 lakh crore through repo auctions and \u20b925.8 lakh crore via daily repo auctions to address short-term funding needs.

<\/p>\n\n\n\n

Additionally, the RBI has injected \u20b960,000 crore by purchasing government securities and \u20b945,000 crore through currency swap auctions. These measures aim to ensure adequate liquidity in the financial system and support economic stability.
<\/p>\n\n\n\n

\"\"
X\/BigBreakingWire<\/a> <\/figcaption><\/figure>\n\n\n\n
\n
India\u2019s Economy Expected to Grow 6.2%-6.3% in Q3 FY25: SBI Research<\/a><\/blockquote>