RBI Bulletin - September 2021 - আৰবিআই - Reserve Bank of India
RBI Bulletin - September 2021
The Reserve Bank of India today released the September 2021 issue of its monthly Bulletin. The Bulletin includes two Speeches, five Articles and Current Statistics. The five articles are: I. State of the Economy; II. Changes in Sectoral Bank Credit Allocation: Developments since 2007-08; III. Private Corporate Investment: Growth in 2020-21 and Outlook for 2021-22; IV. Financial Inclusion Plan – Reflecting the Growth Trajectory; and V. Financial Inclusion Index for India. I. State of the Economy Prospects are brightening for the economy achieving escape velocity from the pandemic as the second wave wanes and preparedness for future remains on war-alert status. Aggregate demand is gaining firmer ground, while on the supply side, IIP and core industries mirror improvement in industrial activity and services sector indicators point towards sustained recovery. The trajectory of inflation is shifting down more favourably than anticipated. As pandemic scars heal and supply conditions are restored with productivity gains, a sustained easing of core inflation can be expected, which will reinforce the growth-supportive stance of monetary policy. A highlight of this issue of the State of the Economy is an analysis of the divergences in monetary policy actions between emerging market economies and their correspondence with underlying macroeconomic performance. The broad findings are:
II. Changes in Sectoral Bank Credit Allocation: Developments since 2007-08 The evolving patterns in credit allocation across sectors assume significance, as this can have implications for economic growth and employment generation. This article examines the changes in credit allocation, between industrial and non-industrial sectors (agriculture and allied activities, services, and personal loans segment), along with the lending behaviour of banks since 2007-08. It also empirically assesses the impact of COVID-19 pandemic on credit delivery and sectoral credit offtake. Highlights
III. Private Corporate Investment: Growth in 2020-21 and Outlook for 2021-22 In this article, the near-term private investment outlook is assessed based on the project proposals data on capex phasing plans indicated by the private corporate sector. The investment intentions of the Indian private corporates remained sluggish as reflected by lower numbers of new announcements and completions of projects. The article highlights that the pandemic uncertainties adversely impacted appetite for new projects during 2020-21 and posed impediments to timely completion of pipeline projects. In 2021-22, demand for new projects would shape the private investment outlook, along with the progress of the projects already in the pipeline. IV. Financial Inclusion Plan – Reflecting the Growth Trajectory Financial Inclusion Plan (FIP) mandates banks to have a planned and structured approach towards improving financial inclusion across the country, particularly in the unserved/underserved regions. This article highlights the progress made and trends observed in select access and usage indicators of financial inclusion across different bank group(s) and geographies during FY 2016 to FY 2020. Highlights
V. Financial Inclusion Index for India Greater financial inclusion (FI) is crucial for a wider, inclusive and sustainable growth. Therefore, a measure of FI is necessary to effectively monitor the progress of the policy initiatives undertaken to promote FI. A multidimensional composite Financial Inclusion Index (FI-Index) has been constructed based on 97 indicators, which quantifies the extent of financial inclusion and is responsive to availability, ease of access, usage, inequality and deficiency in services, financial literacy, and consumer protection. The article dwells on the creation of the FI-Index in terms of indicators for ‘Access’, ‘Usage’ and ‘Quality’ dimensions, weighting distributions, desired goals for the selected indicators, and methodology to combine these indicators into a composite index. FI-Index, thus constructed, captures information on various dimensions of financial inclusion in a single number ranging between 0 and 100 - where 0 represents complete financial exclusion and 100 indicates full financial inclusion. In a scale of 0 to 100, the annual FI-Index, with three sub-indices viz., ‘Access’, ‘Usage’, and ‘Quality’ computed for 2021 stood at 53.9, driven largely by Access sub-index, which stood at 73.3 reflecting substantial progress made so far in creating financial infrastructure in the country through combined efforts of all stakeholders. The sections in the article review some of the existing studies on financial inclusion, discuss the methodology adopted for the FI-Index, capture outcomes and dwell on the way forward. (Yogesh Dayal) Press Release: 2021-2022/872 |