THE assertion by Reserve Bank of India Governor Mr. Shaktikanta Das that the Indian economy is at the doorstep of revival, not just boosts popular morale but also tells how an organised attempt by the central bank as well as other financial institutions to infuse confidence into the system is making a positive difference. The biggest thrust is on raising adequate capital so that the economy is not starved of funds, Mr. Das has said at a book-launch ceremony. Of course, this is not for the first time that Mr. Shaktikanta Das has made such an assertion.
In the past four months, he has joined other luminaries including Prime Minister Mr. Narendra Modi, Finance Minister Mrs. Nirmala Sitharaman and others in assuring the people that good measures are being adopted to pump confidence into the economy. Initially, people viewed these assertions with certain skepticism and suspicion. But as time passed and good effort started showing good result, the people started feeling confident that India’s economic revival would be better and faster than that of many other countries. Actually, this confidence is the key to the revival of the national economy. For, when a nation approaches an economic challenge with a positive mindset, it launches moves that generate an optimistic sentiment. But if the assertions are a mere public exercise, then everything falls flat on the face.
In that case, the people lose confidence in official efforts and negative results emerge. However, the Indian leadership chose a concrete path of calibrated infusion of funds into various sectors of the economy. The phased manner in which the Government made funds available to the economy, and systematic effort of revival of the banking sector, the focused manner in which new legislation regarding the farm sector was effected came as big boosters to the initial stages of economic revival. Mr. Shaktikanta Das’s statement suggests all these, plus the efforts to spruce up the financial sector in a planned manner. This stage did not come in a day, however. Much before the current coronavirus pandemic hit the world and the country, the Government had already undertaken moves to spruce up the banking sector in particular.
The massive restructuring of public sector banks, and the subsequent infusion of funds into their respective coffers made a lot of positive difference to the economy. That restructuring expanded the customer-base of all the new entities in addition to their resilience against burdens of expectations. That move plus a few other steps were initiated much earlier than the pandemic hit the country, thus adding to the economy an early booster that was so necessary. True, the political arena was agog with senseless criticism of the Government moves even as the Government engaged itself in a successful plan to counter the economic threat-perceptions that were so appropriately foreseen. Despite this, the political community in the Opposition camp showed no appropriate understanding of the process of economic revival and indulged in criticism that stood no professional scrutiny.
There is no doubt that modern economy is a political endeavour and needs to be handled and explained in political terms. Despite this, the Opposition camp refused to understand the logic that the Government adopted while undertaking the process of economic revival. It looked at the efforts through jaundiced eyes and heaped pointless criticism that the people rejected outright. Some sections of the Opposition camp did criticise the Government for its what they called senseless “monetisation” of certain sectors. That criticism may continue even now. But it must be admitted that the Government has succeeded in adding sufficient strength to the economy through well-thought measures. Its infusion of funds into the economy and its projections of the future are realistic and in tune with the needs of various sectors of the economy. Mr. Shaktikanta Das has highlighted all those with a characteristic restraint, offering strong signals that the economy will follow an upward trajectory from now on.