We Haven’t Heard The Last From Government On Economic Reforms, Says RBI’s Das

Calling India’s GDP growth rate slowing to a six-year-low of 5 percent in April-June 2019 as a “surprise”, Reserve Bank of India Governor Shaktikanta Das on Monday said the government’s measures to spur the Indian economy will show results soon.

The RBI, on its part, has been cutting its repo rate to boost the Indian economy as a slowdown has been visible for the past few months, Das said during interactions with CNBC-TV18 and ET NOW news channels.

"I think with the right measures taken, things should improve. It's a positive trend that the government is responding very fast, and I don't think we have heard the last from the government with regard to dealing with the current economic situation,” said Das.

“My expectation is that it will be a continuous process and they would definitely be dealing with other challenges,” he added.

Union Finance Minister Nirmala Sitharaman has over the last three weeks announced several measures, including a special real estate fund, export incentives, mega public sector bank mergers and sops for the MSME and auto sectors, to boost the economy.

"I think one major thing (going forward) would be agriculture marketing. Definitely, I would expect some action from the government with regard to reforms in agricultural marketing," said Das.

Expressing concern over India's Q1 GDP data, the RBI governor said that the numbers definitely look much worse because the central bank had projected a 5.8 percent GDP print. "I think almost everybody had projected not below 5.5 percent or so, but the 5 percent number is a surprise," he said.

The second quarter growth of all advanced economies was lower than the first quarter, so there is a deceleration. "But again, I'm not trying to justify our slowdown through the prism of the global slowdown, although global slowdown does impact growth and results in slowdown we have domestic issues also," the RBI governor said.

Das said it is difficult to make an estimate on when the Indian economy will see a revival because there are several things that are still playing out.

"Now, for example, the Saudi oil crisis was something totally unanticipated. The trade issue between two largest economies...it appears that they are going on the brink but then they pull back...so much of uncertainty happening all around," he said.

Taking into account how various factors play out in the second quarter, RBI will analyse and make assessment on the economy, the governor said.