Monetary Policy Has Limits In Pushing Growth Says Shaktikanta Das

Just a week ahead of the Union Budget 2020 which is to be presented on February 1, RBI governor Shaktikanta Das said that monetary policy has its own limitations and can to an extent only push structural reforms and growth. To boost demand what is needed is fiscal measures and infrastructure push.

This the governor said while speaking at his alma mater St. Stephen's where he added that infrastructure spending shall only help in pushing growth, which has slipped down to 6-year low.

On the sectors which can give the economy a push, Das said tourism, start ups, ecommerce and food processing are some of the sectors. Also, at the same time he gave a suggestion to enhance spending which will have a multiplier effect.

"Structural reforms and fiscal measures may have to be coto provide a durable push to demand and boost growth."

"In my previous talks elsewhere, I have highlighted certain potential growth drivers which, ntinued and further activated through backward and forward linkages, could give significant push to growth. Some of these areas include prioritising food processing industries, tourism, e-commerce, start-ups and efforts to become a part of the global value chain."

"The government is also focusing on infrastructure spending which will augment growth potential of the economy. States should also play an important role by enhancing capital expenditure which has high multiplier effect."

And what has formed the main basis of monetary policy is financial stability.

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