Context

RBI has released annual report for FY19

About

• The report, which is released every year, analyses the working and operations of the RBI and suggests measures to improve the economic performance.
• Release of the new economic capital framework under which RBI will transfer ?1.76 trillion surplus to the government.
• Reviving consumption demand and private investment remains the top priority in the current fiscal.
• RBI, cautioned that a broad-based cyclical downturn is underway in several sectors—manufacturing, trade, hotels, transport, communication and broadcasting, construction, and agriculture.
• The delayed onset and skewed distribution of the south-west monsoon may pose downside risks to crop production and rural consumption demand.
• The central bank has forecast India’s GDP to grow at 6.9% for FY20—in the range of 5.8-6.6% during the first half of the year and 7.3-7.5% in the second half.
• The annual report pointed out that throughout the year, protectionist policy pronouncements and actions dominated the global political arena.
• Another conduit through which trade wars and other sources of global spillovers impacted India during 2018-19 is the intertwining of the finance and confidence channels.
• Viable external financing can become an additional consideration for holding adequate precautionary buffers.
• One of the recommendations of Bimal Jalan committee report is that the central bank should align its accounting year to the Arpil-March fiscal year for better understanding.