India’s central bank will be more amenable to Modi
Tuesday, January 8, 2019
Subject
RBI under new governorship.
Significance
Shaktikanta Das was last month appointed Reserve Bank of India (RBI) governor after Urjit Patel resigned. Prime Minister Narendra Modi’s government had for several months clashed with the RBI over how to foster economic growth. The general election is likely in April or May, when Modi’s Bharatiya Janata Party (BJP) faces a tough fight to win a second consecutive term.
Impacts
- In election campaigning, Modi will emphasise India’s mostly robust quarterly GDP growth figures during his term.
- Indian banks’ level of bad debt could decrease by the end of the fiscal year ending March 2019.
- India will likely widen its fiscal deficit target for 2018/19 (3.3% of GDP) ahead of the 2019/20 budget.
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