No excessive money supply in the system that could stoke runaway inflation: HDFC Bank chairman

Mumbai (Maharashtra) [India], July 16 (ANI): The Reserve Bank of India’s monetary policy has been “very adroitly balanced” and it ensured that there is no excessive money supply in the system that could stoke runaway inflation, HDFC Bank Chairman Atanu Chakraborty said on Saturday.
In his address to the 28th Annual General Meeting of the bank, Chakraborty said, “With both the RBI and Government undertaking measures to combat inflationary pressures, retail inflation is also likely to moderate in the months ahead, providing further support to consumer demand.”
He said the medium-term outlook of the economy remains optimistic and macro-economic fundamentals are still strong, putting India in a better position to weather any major global shocks.
“I am not surprised at a projection of growth around 7.3 per cent in 2022-23, in spite of global headwinds,” he said.
Chakraborty, a former Economic Affairs Secretary, expressed hope that the Indian economy would register healthy growth in the current financial year. “Since a large part of the GDP consists of domestic consumption, I see a healthy growth path during the year,” he said.
Chakraborty noted several factors that indicate healthy growth for the Indian economy.
Low level of corporate taxation and a stabilised GST system that is now showing results in the form of higher tax revenues, he said.
He said a large amount of spending on Infrastructure projects through PM’s Gati Shakti programme would boost economic growth.
PLI scheme is already showing results and manufacturing would further get a fillip on account of this as well on account of rebound in domestic consumption. This will also bring a larger chunk of global supply chain into the country and create a new and diverse set of demand drivers, he said.
HDFC Bank chairman noted that the services sector is rebounding sharply with IT sector on a sharp growth curve. We see recovery in trade, travel and hospitality, he said.
On the impact of the global crisis on the Indian economy, Chakraborty said, “Previous global crisis had seen, Indian financial and banking sector severely impacted. Reforms, tighter regulation and introduction of technology have ensured that Indian financial sector today is in a position to fuel growth through credit expansion and bring innovations through Fintechs.”
“Digitalisation at a large scale and formalisation of the economy has made the financial sector more transparent, competitive and improved its reach. The capital market is vibrant and well-regulated and insurance sector has been opened up. These would, I strongly feel, underpin growth of Indian economy over next few years,” he added. (ANI)