NEW DELHI: The Reserve Bank of India Governor Shaktikanta Das on Wednesday said that the Covid-19 pandemic hit poor and vulnerable sections of the society more and for sustainable growth, restoring private consumption will be very crucial going forward.
“The lasting damage inflicted by the pandemic on these segments is of serious concern for inclusive growth. In the medium to long-run, both efficiency and equity will greatly matter for sustainable growth and macroeconomic performance,” Das said.
He was addressing the 48th convention of All India Management Association. “Our endeavour should be to ensure livable and sustainable growth in the post-pandemic future. Restoring the durability of private consumption, which has remained historically the mainstay of aggregate demand will be very crucial going forward,” Das observed.
The RBI governor underlined the need for increased investment in healthcare, education, digital and physical infrastructure to ensure sustainable growth and generate employment opportunities. “To achieve our objectives in all the areas ... we need a big push to infrastructure, particularly in areas of health, education, low carbon and digital economy in addition to transport and communication,” Das said. “Income and job creation with digitalisation and innovation can bring about a new age of prosperity for a large number of people,” he said, at the same time warning of the digital divide.
He added that the pandemic brought lots of structural changes in the economy, which has created both challenges for some sectors and opportunities for others. “The shift to online has created new opportunities and challenges for employment-intensive sectors like travel, hotels, restaurants and recreation. Some of these changes are going to stay beyond the pandemic,” said the RBI governor.
At the same time digitisation also provided new opportunities for technology drive sectors, the governor said. “The Covid pandemic has provided a new impetus to technology-driven companies such as fintech, edtech and healthtech, which are likely to see increased funding activity in the coming years,” said Das.
On a positive note, he added that India’s financial system has transformed rapidly to support the growing needs of the economy. “While banks have been the primary channels of credit in the economy, recent trends suggest an increasing role of non-banking channels,” Das said.