The Reserve Bank of India (RBI) Governor Raghuram Rajan cautioned about a “sharp” slowdown in Chinese economy which, he said, remained a “significant risk” for the global economy.
A sharp contraction in China’s imports over the past year has led to spill-overs through the trade, confidence, tourism and remittance channels and SAARC nations had not been able to avert its impact,
Bad loans in the banking system were likely to grow over current levels and in addition there might be serious weaknesses in the shadow banking system, which could feed back to banks.
1. The RBI Governor also lauded the efforts taken by the government in implementing structural reforms to revive growth.
2. Leaving aside the Goods and Services Tax (GST) reform, a number of other significant reforms have also taken place, including the recent passage of the new Bankruptcy bill, which is likely to speed up the resolution of distress tremendously.
3. He also lauded the government’s decisions to allocate public resources like spectrum and mines as well as the process of appointing critical personnel in sectors such as public sector banks which according to him significantly increases transparency in our system.