India’s growth momentum: The Reserve Bank on Tuesday mentioned that India’s growth momentum is probably going to proceed in 2023-24 even as it made a case for pushing structural reforms to take care of the geopolitical developments and likewise to obtain sustained growth within the medium-term.
The Reserve Bank’s annual report flagged slowing global growth, protracted geopolitical tensions and a possible upsurge in monetary market volatility as possible downside risks to growth.
The report notes that volatility has ebbed in global monetary markets and risks to monetary stability from the failure of banks in some superior economies (AEs) in March 2023 have eased. Resolute coverage actions have stemmed the tide of confidence runs for now. “Amidst strong global headwinds, the Indian economy is expected to have recorded a growth of 7.0 per cent in real GDP in 2022-23,” it mentioned.
A sustained restoration in discretionary spending, notably in contact-intensive companies, restoration of shopper confidence, excessive competition season spending after two consecutive years of COVID-19-induced isolation and the federal government’s thrust on capex offered impetus to the growth momentum.
Pace of year-on-year growth moderated in 2nd half of 12 months
In the second half of the 12 months, nevertheless, the tempo of year-on-year growth moderated due to unfavourable base results, weakening personal consumption demand attributable to excessive inflation, slowdown in export growth and sustained enter price pressures, it mentioned.
“On the back of sound macroeconomic policies, softer commodity prices, a robust financial sector, a healthy corporate sector, continued fiscal policy thrust on quality of government expenditure, and new growth opportunities stemming from global realignment of supply chains, India’s growth momentum is likely to be sustained in 2023-24 in an atmosphere of easing inflationary pressures,” the report mentioned.
Slowing global growth, protracted geopolitical tensions and a possible upsurge in monetary market volatility following new stress occasions within the global monetary system, nevertheless, might pose downside risks to growth.
“It is important, therefore, to sustain structural reforms to improve India’s medium-term growth potential,” the 311-page report mentioned.
RBI on conduct of financial coverage
The RBI additionally mentioned the conduct of financial coverage will proceed to be guided by the target of reaching the medium-term goal for Consumer Price Index (CPI) inflation of 4 per cent inside a band of +/- 2 per cent, whereas supporting growth.
The Reserve Bank mentioned it’s going to undertake liquidity administration operations in sync with the financial coverage stance and making an allowance for the wants of the productive sectors of the financial system. During 2023-24, the report mentioned the Reserve Bank goals at increasing the continuing pilots in CBDC-Retail and CBDC-Wholesale by incorporating numerous use circumstances and options.
“The pilot in CBDC-Retail is proposed to be expanded to more locations and to include more participating banks,” the report mentioned.
The worth of e-Rupee-Wholesale and e-Rupee-Retail in circulation stood at Rs 10.69 crore and Rs 5.70 crore, respectively, as on March 31, 2023.
On forex in circulation, it mentioned the worth and quantity of banknotes in circulation elevated by 7.8 per cent and 4.4 per cent, respectively, throughout 2022-23 as in contrast with 9.9 per cent and 5 per cent, respectively, in 2021-22.
In worth phrases, the share of Rs 500 and Rs 2,000 banknotes collectively accounted for 87.9 per cent of the whole worth of banknotes in circulation as on March 31, 2023, as in contrast to 87.1 per cent a 12 months in the past.
Withdrawal of Rs 2,000 notes
The Reserve Bank has introduced withdrawal of Rs 2,000 notes, and holders of the best worth forex have been given time until September 30 to change or deposit them.
“In volume terms, Rs 500 denomination constituted the highest share at 37.9 per cent, followed by Rs 10 denomination banknotes which constituted 19.2 per cent of the total banknotes in circulation as on March 31, 2023,” it mentioned.
There had been 5,16,338 lakh items of Rs 500 denomination notes totalling Rs 25,81,690 crore at end-March 2023. The variety of Rs 500 notes at end-March 2022 had been 4,55,468 lakh.
The report additionally mentioned there have been 4,55,468 lakh items of Rs 2,000 notes amounting to Rs 3,62,220 crore at end-March. In quantity phrases, the Rs 2,000 notes in circulation declined to 1.3 per cent of complete forex in circulation at end-March 2023 in contrast to 1.6 per cent within the year-ago interval. In worth phrases, it too declined to 10.8 per cent from 13.8 per cent at end-March 2022.
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Increase in counterfeit notes
The report additional mentioned that in contrast to 2021-22, there was a rise of 8.4 per cent and 14.4 per cent within the counterfeit notes detected within the denominations of Rs 20 and Rs 500 (new design), respectively.
The counterfeit notes detected within the denominations of Rs 10, Rs 100 and Rs 2,000 declined by 11.6 per cent, 14.7 per cent and 27.9 per cent, respectively. The indent and provide of banknotes by BRBNMPL and SPMCIL stood at 2,26,000 lakh and a couple of,26,002 lakh items, respectively.
The complete expenditure incurred on safety printing throughout 2022-23 was Rs 4,682.80 crore as towards Rs 4,984.80 crore within the earlier 12 months. The RBI additionally disposed of 4,824 lakh items of dirty Rs 2,000 notes within the final fiscal, up from 3,847 items within the previous 12 months.
(With PTI inputs)Â
