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Economy

Lower deficit, higher growth, cheaper loans: RBI payout to government is the stimulus economy needs

A surplus transfer to the government by the central bank is not out of the ordinary in developed economies. Indeed, the RBI’s robust balance sheet gives it a headroom to provide for contingencies and yet pass on its hefty ‘windfall’ to a cash- strapped government. It could keep fiscal deficit in check and interest rates low, shoring up the economy.
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madhavankutty-g
5 Sep 2019 9 Mins Read 0 comment
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It was November 2009. The global meltdown had turned into a full-blown crisis and the tremors were being felt as much in Mint Street as in Wall Street. A series of stimulus packages were announced for various sectors and bank credit was growing at a whopping 30%. Infra was the darling of bankers as far as lending was concerned. Amidst
government now needs a helping hand to assuage the situation. Some of the causative factors for the downturn are extraneous in nature and beyond anybody’s control. But being a banker to the government and a responsible regulator tasked with ensuring growth and stability, it is incumbent on the RBI to play its part well. ( Graphics by Mohammad Arshad)
It was November 2009. The global meltdown had turned into a full-blown crisis and the tremors were being felt as much in Mint Street as in Wall Street. A series of stimulus packages were announced for various sectors and bank credit was growing at a whopping 30%. Infra was the darling of bankers as far as lending was concerned. Amidst government now needs a helping hand to assuage the situation. Some of the causative factors for the downturn are extraneous in nature and beyond anybody’s control. But being a banker to the government and a responsible regulator tasked with ensuring growth and stability, it is incumbent on the RBI to play its part well. ( Graphics by Mohammad Arshad)

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