Mumbai, Feb 11 (Agency) Terming the emphasis laid by the RBI on warranting policy support till broad-based durable recovery as “encouraging”, FICCI said it reiterates that protecting lives and livelihoods is a clear priority amidst the current circumstances. Maintaining its accommodative stance to revive and sustain growth and to mitigate the impact of the Covid-19 pandemic while ensuring that inflation remains within the target going forward, the Monetary Policy Committee, led by Governor Shaktikanta Das, has kept the key policy repo rate unchanged at 4 per cent.
“The Reserve Bank of India continued maintaining an accommodative stance reiterating that protecting lives and livelihoods remains a clear priority amidst the current circumstances. Even as the Governor indicated steps towards a progressive return to normalcy in liquidity management, the emphasis laid on warranting policy support until a broad-based durable recovery finds its way is encouraging,” FICCI President Sanjiv Mehta said. He noted that uncertainty continues to remain on the fore on account of global and domestic factors with the underlying threat of the pandemic still not fully mitigated. “The Central Bank has put across a GDP growth estimate of 7.8 per cent for the year 2022-23. The RBI has also assessed some improvement in capacity utilization levels in its surveys. However, the overall demand in the economy remains weak and is yet to touch pre-pandemic levels,” Mehta said. Stating that the government has given a lot of focus on capex-led growth in the economy in the Union Budget, he said that this would help boost demand, improve capacity utilization levels, and generate more employment, which in turn would lead to greater demand.
“We need such a virtuous growth cycle and hope that RBI will work in close coordination with the government to ensure this,” Mehta added. Expressing satisfaction on the extension of the on-tap liquidity window for emergency health care services and contact intensive services till June 30, 2022, from March 31, 2022, as announced earlier, he said, “The contact-based services have been most severely hit by the recurring waves of the pandemic making a move to sustained recovery extremely difficult for the sector.”