Reserve Bank Governor Urjit Patel yesterday said India’s economic growth will make a sharp recovery following the recall of old 500 and 1,000 rupee notes. In an interview to CNBC-TV18, Mr Patel made a strong case for continuing with globalisation, even in the face of a potential shift to trade protectionism under US President Donald Trump, as India has benefited from open trade. He said, the remonetisation has happened at a fast pace and that was part of the plan.
RBI last week lowered economic growth projection for the current fiscal to 6.9 per cent from the previously estimated 7.1 per cent, but saw it bouncing back in a big way to 7.4 per cent in 2017-18. Mr Patel said, the benefit of junking 86 per cent of currency in circulation will take time to fully play out and needs more work to ensure they are lasting.
Asked when India could achieve 9 per cent GDP growth, he said it is difficult to predict sustainable growth rates. The six-member monetary policy committee (MPC) headed by Patel had last week kept interest rates unchanged at 6.25 per cent for the second straight meeting and changed policy stance to neutral from accommodative.