Excerpts from RBI Governor Shaktikanta Das’s interaction with the media post the monetary policy announcement:
What does the change in stance to accommodative mean?
Accommodative stance would basically mean that rate increase is off the table.
How does RBI justify such a high real interest rate?
There has been a lot of discussion about real interest rate. So far as we are concerned, our decision at the moment is driven by inflation and growth. The MPC [monetary policy committee] targets a certain level of inflation keeping in mind the requirements of growth. But while deciding all these things, other factors do come in.
At this point in time, I do not want to spell out what should be the real interest rate because as we take decisions, it is for you to judge how close we are to the real interest rate.
What is the view on liquidity requirement in the system?
The Reserve Bank of India will ensure adequate liquidity in the system to meet the productive requirements of the economy.
Is there is a concern about borrowing by public sector entities crowding out private investments?
First, the government has broadly followed the fiscal glide path in the last five years. We do expect the government to remain fiscally prudent.
So far as the borrowings by the public sector enterprises and crowding out effect are concerned, the total borrowing requirement of the public sector companies has to be seen from the perspective of two points. One, there are certain public sector companies like the NTPC or NHAI which undertake a lot of capital expenditure, which have their own revenue stream to repay their borrowings.
So, it is better to look at that borrowing as a part of the capital investment requirements of the economy rather than borrowing by the government.
When is the revised circular on stressed assets expected?
The revised circular will be issued very shortly. It has taken a little more time than we anticipated. Very shortly, would be in a matter of 3-4 days.
In your last press conference you indicated the Jalan Committee report was expected shortly, but the report is yet to be out. There are reports that the Finance Ministry is not okay with the recommendations?
The Jalan Committee is working independently. I do not interfere or involve in any manner in the working of the committee. The committee is working on its own in an objective manner. The rest of it, which is appearing in the papers, I also see it in the papers (laughs). So let the report of the committee come, they need some extra time. We would expect the report to come out very shortly. The committee will take an appropriate view.
