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Updated: Sep 16, 2019 22:23 IST

RBI governor Shaktikanta Das on Monday admitted that the low GDP growth of 5 per cent was a “surprise”, but expressed confidence that the economy will bounce back as the government has announced a number of steps to give a fillip to exports amid slowdown concerns.

The governor said that the RBI has been cutting rates to give a boost to the economy as slowdown was visible for the past few months.

The RBI slashed benchmark interest rate four times consecutively since January 2019. The central bank reduced the repo (short term lending) rate by 1.10 percentage points during the year.

“I think with right measures taken, things should improve. It’s a positive trend that the government is responding very fast and I don’t think we have heard the last from the government with regard to dealing with the current economic situation ... My expectation is that it will be a continuous process and they would definitely be dealing with other challenges,” he told news channels.

Watch: Policy Decode: Demystifying the ‘slowdown’ in Indian economy

On Saturday, Finance Minister Nirmala Sitharaman announced another set of measures to boost the economy that included over Rs 50,000 crore package for exports and creation of a Rs 20,000 crore fund for unfinished real estate projects to complete about 3.5 lakh dwelling units in affordable and middle income segments.

In order to provide additional liquidity to the real estate sector, the government, said the Finance Minister, is planning to relax external commercial borrowing (ECB) guidelines in consultation with the Reserve Bank of India (RBI) to facilitate financing of home buyers who are eligible under the Pradhan Mantri Awas Yojana (PMAY).

The fresh round of measures come on top of steps last month to boost vehicle purchases, attract foreign funds and boost investments in the economy.

The steps come against the backdrop of the Gross Domestic Product growth declining for the fifth consecutive quarter in April-June 2019 to 5 per cent, the lowest in six years.

Asked to describe the current state of economy — whether it was a recession, a slowdown or just tough days — Sithraman said: “I am not here to give it a name. I am here to work.”

On the question of structural reforms, the governor said he has already pointed that out in RBI’s annual report.

“I think one major thing would be agriculture marketing. Definitely, I would expect some action from the government with regard to reforms in agricultural marketing,” he said.

Expressing concern over the first quarter GDP numbers, the RBI Governor said the numbers definitely looked much worse because the RBI had projected 5.8 per cent.

“I think almost everybody had projected not below 5.5 per cent or so, but the number 5 per cent is a surprise,” he said.

He also said the second quarter growth of all advanced economies was lower than the first quarter so there is a deceleration.

Asked when will the economy see revival, Das said it is difficult to make an estimate as there are many things which are still playing out.

“Now for example the Saudi oil crisis it was something totally unanticipated. The trade issue between two largest economies some statements here it appears that they are going on the brink but then they pull back...so much of uncertainty happening all around,” he said.

How various factors play out in the second quarter, the RBI will analyse and make assessment, he added.

(With agency inputs)