No excess money supply in system that could fuel runaway inflation: HDFC Bank Chairman

July 16, 2022 7:15 p.m. STI

Bombay (Maharashtra) [India]Jul 16 (ANI): The Reserve Bank of India’s monetary policy was “very adroitly balanced” and it ensured that there was no excessive money supply in the system which could fuel runaway inflation, said HDFC Bank Chairman Atanu Chakraborty on Saturday.
In his address to the bank’s 28th Annual General Meeting, Chakraborty said: “With the RBI and the government taking steps to tackle inflationary pressures, retail price inflation is also expected to moderate in the coming months. , providing further support to consumer demand”.
He said the medium-term outlook for the economy remains optimistic and macroeconomic fundamentals are still strong, putting India in a better position to weather any major global shocks.
“I am not surprised by a growth projection of around 7.3% in 2022-23, despite global headwinds,” he said.
Chakraborty, a former economic affairs secretary, expressed hope that India’s economy would register healthy growth in the current financial year. “Given that a large portion of GDP is domestic consumption, I see a healthy growth trajectory over the year,” he said.

Chakraborty noted several factors that point to healthy growth for the Indian economy.
A low level of corporate taxation and a stabilized GST system that is now delivering results in the form of increased tax revenue, he said.
He said much of the spending on infrastructure projects under the Prime Minister’s Gati Shakti program would boost economic growth.
The PLI scheme is already showing results and manufacturing would also get a boost because of this as well as due to the rebound in domestic consumption. It will also bring more of the global supply chain into the country and create a new and diverse set of demand drivers, he said.
The chairman of HDFC Bank noted that the service sector is rebounding strongly with the IT sector on a steep growth curve. We are seeing a recovery in trade, travel and hospitality, he said.
Regarding the impact of the global crisis on the Indian economy, Chakraborty said: “The previous global crisis had seen India’s financial and banking sector severely affected. so that the Indian financial sector today is able to fuel growth through credit expansion and bring innovation through Fintechs.”
“The large-scale digitization and formalization of the economy has made the financial sector more transparent, more competitive and has improved its reach. The capital market is dynamic and well regulated and the insurance sector has been opened up. I am convinced that this would support the growth of the Indian economy over the next few years,” he added.(ANI)

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