Despite all the challenges faced by the Indian economy, Shaktikanta Das, governor of Reserve Bank of India stressed on the importance of “sentiment and mood”, which according to him should be “positive and optimistic.”
“The mood today ranges from existential angst to a positive attitude,” said by das at FIBAC which is a banking sector conclave organised by the Federation of Indian Chambers of Commerce and Industry and the India Bank’s Association and Industry body.
The governor said when watching business news or reading newspapers, the mood is not positive and optimistic.
According to Das:
“One does realise that there are challenges in the economy. One does realize there are sectorial issues. One does realize there are severe external global headwinds and India cannot live in isolation. I am not saying we maintain a Panglossian countenance that we smile away every difficulty. But, in the real economy, the mood is very important”
Based on the definition given in the Merriam-Webster dictionary, the term Panglossian means an excessively optimistic attitude.
Even in the midst of all the challenges faced by the country today, there are several opportunities. But together, the financial sector, the business community, regulators and policymakers should do something about these challenges and look ahead with more confidence, said by the RBI governor.
“I think the sentiment is very important. Please look at the opportunities ahead of us. We do realise that there are challenges and difficulties coming from external and domestic surges, but one has to look at the opportunities and capitalise on that.”
In the meantime, March quarter earnings are showing that the Indian economy has slowed down further.
Various sectors including packaged consumer goods, consumer durables, passenger vehicles, and real estate are facing severe challenges as sales have reduced dramatically. These sectors are showing visible signs of a sluggish economy.
The RBI governor also spoke how important financial stability is. He said;
“Weaker-than-expected growth with signs of a slowdown in major economies, as projected by multilateral institutions such as the International Monetary Fund, is one of the risks to global financial stability at this juncture.”
“Looming trade tensions, geopolitical risks, and related uncertainties continue to exert pressure on the investment outlook.” He also added, “Central banks and other regulators are required to follow the cardinal principle that the regulator never sleeps.”