RBI not worried about Centre’s financial health, says Das

Despite government spending picking up and set to gain further momentum in the future to spur growth in the economy, the Reserve Bank of India (RBI), which is the banker to the government, is not worried about the Centre’s financial health, said RBI Governor Shaktikanta Das on Friday.

Despite government spending picking up and set to gain further momentum in the future to spur growth in the economy, the Reserve Bank of India (RBI), which is the banker to the government, is not worried about the Centre’s financial health, said RBI Governor Shaktikanta Das on Friday.

“The government has a fiscal consolidation path which they have announced in the [last Union] budget. There was fiscal expansion during Covid but the overall expansion that India undertook in the fiscal was very calibrated and targeted,” Mr. Das said while answering a question from The Hindu.

“After the pandemic the government has announced a fiscal consolidation roadmap and by and large they are sticking to that. Even recently also, so far as current year fiscal deficit is concerned a statement has been made in the Finance Ministry that the government will stick to the fiscal deficit and they are targeting fiscal consolidation roadmap,” he added.

“So, so far as Central finances are concerned, I do not see any major problem or anything that warries the central bank,” the governor further said.

The Centre’s fiscal deficit hit 36% of its annual target in the first five months of the current fiscal, up from 32.6% the year earlier.