If the economy is to improve, then policy support is necessary for the manufacturing sector, know what RBI has to say

According to the RBI note, very soon the manufacturing sector will reach the pre-Covid level, but policy support is necessary to sustain the growth in the long term.

To accelerate the pace of economic recovery, the manufacturing sector needs policy support.

Reserve Bank of India ,Reserve Bank of India) said in his note that fast recovery of economy ,Economic recovery) For manufacturing sector ,Manufacturing Sector) and for this policy support needs to be continued. Very soon the manufacturing sector will reach the pre-Covid level, but policy support is necessary to sustain the growth in the long term. Most macroeconomic variables will reach pre-corona levels in the short term, but long-term growth will take time. It said that as the outlook of the manufacturers turned positive, the re-imposed restrictions to contain the COVID-19 pandemic slowed down the revival process. The pandemic adversely affected the sentiments of producers by bringing down various parameters to historically low levels.

According to the article, “While the key macroeconomic factors are expected to reach pre-Covid levels in the near future with the improvement in demand conditions, it may take some time to get back on track in the long term.” It has been said that faster vaccination, the budget proposal for 2022-23 and other reforms will accelerate the revival of the economy and pave the way for the economy to regain its growth potential in the medium term. According to the article, “However, with continued policy support, the revival can be smooth and speedy.” The RBI has clarified that the views in the article are those of the author and do not necessarily coincide with the views of the Reserve Bank.

There are many advantages of centralized bad bank

The Reserve Bank’s article on the bad bank said that the National Asset Reconstruction Company Limited (NARCL) will help in reducing the financial pressure of the banks and will speed up the loan cycle. This has been said in an article by RBI. It said that the worldwide evidence shows that there are many benefits of centralized bad banks. This includes freeing up resources of banks for critical infrastructure activities, positive signals to investors and customers, etc.

Formation of Bad Bank by taking lessons from the world

The article, titled ‘Band Banks in Crisis Helpful Bands: Lessons from Experiences of Different Countries for India’ in the RBI’s monthly bulletin, has been authored by Snehal S Herwadkar, Arpita Agarwal and Sambhavi Dhingra of the Banking Research Division, Department of Economic and Policy Research. It is clarified that the views are those of the authors and not those of RBI.

Will help in overcoming the financial crisis

According to the article, “In the context of India, the formation of a National Asset Reconstruction Company (NARCL) with clear responsibility and government guarantees will be helpful in relieving the financial pressure of commercial banks.” Finance Minister Nirmala Sitharaman 2021-22 It was announced in the budget of the government that the government would set up a band bank.

Bad loans of about 83 thousand crores will be transferred to bad banks

State Bank of India chairman Dinesh Khara said last month that the bad bank in India has got all the approvals to start operations. Initially a total of 38 large stressed accounts amounting to Rs 82,845 crore have been identified for transfer to NARCL.

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