The RBI governor Shaktikanta Das is considering dynamic changes in five areas that are underway and will shape the future of the economy. In his talks with CII, the governor focused on five areas where India can leverage its strengths and position as a leader in the league of global players.

The five major dynamic shifts that the Governor has talked about are (i) transfer in favor of the farm sector; (ii) changing the energy mix in favor of renewables; (iii) information and communication technology (ICT), and to leverage power growth from start-ups; (iv) supply/value chain changes, both domestic and global; And (v) infrastructure as a force multiplier of development.

“They (the five factors) may escape our attention in this all-consuming engrossment with the [Covid-19] pandemic, but they could be nursing the potential to repair, to rebuild and to renew our tryst with developmental aspirations. These dynamic shifts have been taking place incipiently for some time,” Das told the Confederation of Indian Industry (CII) via video conference.

The Governor congratulated the government for initiating reforms in the agricultural sector that would boost the income of farmers and add value to the economy. He said that the important challenge facing the Indian agricultural sector is surplus management rather than self-sufficiency.

On renewable energy, he said that India has performed well in installed capacity in the last five years. He said that the share of renewable energy in installed capacity increased from 11.8% in March 2015 to 23.4% at the end of March 2020.

He said that a change in the energy mix would help increase per capita energy consumption.

The Governor noted global regulatory challenges on India’s ICT sector immigration. He acknowledged the role of India ICT as a low-cost supplier of knowledge solutions.

He said that India can take advantage of rising shifts in global value chains and increase its stake in these value chains. He said the conclusion of bilateral trade deals with the US, EU, and the UK could increase India’s position in global value chains.

The Governor called for diversifying the funding of infrastructure projects in India. He said that both the public and private sectors would have to play a role in developing the infrastructure which required heavy investment.

Regarding the forex rate, Das said that the RBI has no fixed target for the rupee, but will monitor unfair volatility.

The RBI governor assured the industry that the central bank would not hesitate to take steps amidst the challenges and would take extreme caution as and when necessary.

He said that various liquidity measures taken by the central bank have revived the corporate bond market.

Das said that The Corporate bond issuance has touched a figure of Rs 1 lakh crore in the first quarter, which is much higher than the same period a year ago.

The RBI governor said he advised banks to conduct a stress test and continuously raise capital to meet the challenges.