Reserve Bank of India Governor Urjit Patel on Wednesday addressed the media on the condition of the Indian economy post demonetisation. Speaking to reporters, Patel said that the discretionary consumer demand which had been impacted by demonetisation was expected to bounce back. Patel further advocated the shift in the monetary policy stance from accommodative to neutral and said that it would provide the required flexibility to move the policy rate in either direction. He further said that with the remonetisation taking place at an accelerated rate, economic activity was expected to pick up from the Q4 of Financial Year 2017. Earlier on Friday, in an interview, Patel had said that the RBI had grown a thick skin quickly while doing its job post demonetisation and the economy would stage a “sharp V” recovery as the negative impact of the note ban would be for a very short time.
Speaking to CNBC-TV 18, Patel had said that remonetisation was happening at quite some pace, which was part of the plan which was subsequent yo the ban of specific bank notes. He had said that the RBI’s production plans and supply processes would ensure that remonetisation was happening at an accelerated speed. Speaking about the criticism the RBI has faced post demonetisation, Patel had said that it was important that one grew a thick skin quickly in this line of business and the RBI had done precisely that and gone about its work.
He spoke about the major challenges undertaken by the RBI in the past few months and said that they were open to valid criticisms and took it in good spirit and improve themselves. When asked if the main objective of demonetisation had been achieved, Patel said that the issue of fake currency notes was an important issue which had to be addressed. Of the other benefits, he said that things like greater accountability, better public finance and more transparency would take to fully play out.