In his address after the three-day meeting of the rate-setting panel, RBI Governor Shaktikanta Das said recovery in aggregate demand gathered pace in August-September, and it is reflected in high-frequency indicators, like railway freight traffic; port cargo; cement production; electricity demand; e-way bills; GST and toll collections.
''The ebbing of infections, together with improving consumer confidence, has been supporting private consumption,'' he said, and added the pent-up demand and the festival season should give further fillip to urban demand in the second half of the financial year.
Also, rural demand is expected to get impetus from continued resilience of the agricultural sector and record production of kharif foodgrains in 2021-22 as per the first advance estimates.
Das also said the improved level in reservoirs and early announcement of the minimum support prices for rabi crops has boosted the prospects for rabi production. The support to aggregate demand from government consumption is also gathering pace.
The Governor said critical support to aggregate demand also came from exports, which remained in excess of USD 30 billion for the seventh consecutive month in September 2021, reflecting strong global demand and policy support. Further, recovery in the services sector is also gaining traction.
''Impact of elevated input costs on profit margins, potential global financial and commodity markets volatility and a resurgence in COVID-19 infections, however, impart downside risks to the growth outlook,'' Das said while retaining the projection for real GDP growth at 9.5 per cent in 2021-22.
He said the economic growth is projected at 7.9 per cent in the second quarter; 6.8 per cent in third quarter and 6.1 per cent in January-March quarter of 2021-22.
The National Statistical Office, the official agency of the government, on August 31, had said the real GDP growth for the first quarter of 2021-22 was at 20.1 per cent.
The RBI projected the GDP growth for the first quarter of the next financial year at 17.2 per cent.
In its June policy review, the central bank had lowered the country's growth projection for the current financial year to 9.5 per cent from 10.5 per cent estimated earlier.
Das also said improvement in government capital expenditure, together with congenial financial conditions, could bring about an upturn in the much-awaited virtuous investment cycle.
Quoting a RBI survey, he said capacity utilisation in the manufacturing sector, which declined sharply in April-June period of 2021-22 under the second wave, is assessed to have recovered in the second quarter and further improvement is expected in the ensuing quarters.
Select NBFCs to now have internal ombudsman on lines of banks
With the objective of upping customer experience, the Reserve Bank on Friday announced an internal ombudsman scheme (IOS) to redress grievances at select non-banking finance companies (NBFCs).
The IOS will be on the lines of a similar system adopted at banks and will redress grievances related to deficiencies in service, Governor Shaktikanta Das said, announcing the new measure in the statement on regulatory policies along with the bi-monthly review of the monetary policy.
“The increased significance, strength and reach of NBFCs across the country have necessitated having in place better customer experience including grievance redress practices,” he said.
Das said over the last few years, the RBI has taken a slew of measures to improve consumer protection at NBFCs which include asking such lenders to appoint nodal officers to address grievances in 2013 and launch of the ombudsman scheme for NBFCs in 2018.
“With a view to further strengthen the internal grievance redress mechanism of NBFCs, it has been decided to introduce the Internal Ombudsman Scheme (IOS) for certain categories of NBFCs which have higher customer interface,” he said.
There will be an internal ombudsman at the top of the NBFCs' internal grievance redress mechanism to examine customer complaints which are in the nature of deficiency in service and are partly or wholly rejected by the NBFCs, he said, adding detailed instructions on the same will be issued separately.
Meanwhile, Das also announced a six month extension in the facility which allows banks to on-lend through NBFCs and get the priority sector lending tag, till March 2022.
He reminded that bank lending to registered NBFCs (other than micro-lenders) for on-lending to agriculture (investment credit), Micro and Small enterprises and housing (with an increased limit) was permitted to be classified as priority sector lending up to certain limits in August 2019.
Increased traction has been observed in delivering credit to the underserved/unserved segments of the economy through the scheme, which was last extended till September 30 in April, Das said.