new Delhi. State Bank of India (SBI) economists have emphasized on the second round of financial support for the affected sectors of the economy. He has also warned that after September, when the six-month moratorium on repayment will be over, banks can release the increased figures for non-performing amount (NPA).
Economists have noted in a note that there appears to be a weak correlation between the fast-growing market and improving economic conditions. This situation is seen to be largely "irrational exuberance". He said that the simple cash being provided by the Reserve Bank could also contribute to the boom in the market. Economists said, "If the markets are good, it may not mean a better economy."
Economists are also trying to tell that India cannot depend only on the betterment of agriculture sector for the growth of gross domestic product (GDP). He believes that even if the best performance of 15.6 percent achieved in agriculture sector in 1951- 52 is achieved, then even then GDP will increase by 2 percentage points. In the note he said, "We should think of second round of financial support to support the least affected areas." It is noteworthy that the government has given a stimulus package of Rs 20 lakh crore for the revival of the economy. The announcement has already been made, but it contains only a 10th of the actual financial spending package.
It states that there has been an interesting change in consumer behavior during the lockdown. This can have a wide positive impact for the Indian banking system. During this time there has been a decrease in per credit card or debit card transactions. During this period, consumer transactions have been limited to daily essentials rather than luxury goods. During this period, in case of credit cards, the transaction per card declined from Rs. 12 thousand to Rs. 3,600 while the transaction with debit card decreased from Rs. 1000 to Rs. 350. This may have an impact on NPAs of banks in the coming times. It also states that later family members will start borrowing in exchange for gold and if this trend increases the percentage of secured loans of banks may increase.
This post was published on June 29, 2020 6:39 pm
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