Business

RBI Highlights Services Sector as Growth Catalyst for Emerging Economies

RBI Deputy Governor Michael Debabrata Patra emphasized the importance of emerging and developing economies utilizing the services sector to promote productivity growth. He suggested that investing in information and communication infrastructure, reducing trade costs, and implementing business-friendly reforms could encourage private sector participation in this effort. Patra made these remarks during the Sixth Asia KLEMS Conference held at Lonavala.

Also Read: IIFL Finance Targets Rs 20,000 Crore in Fundraising for Fiscal Year 2024

Furthermore, Patra highlighted that increasing labor force participation rates, particularly among women and older workers, could contribute to productivity growth. However, achieving this would necessitate investments in improving workability, retraining, and acquiring new skills that align with evolving technology. Patra emphasized the need for a comprehensive policy intervention that encompasses multiple strategies to effectively revive and sustain productivity growth, acknowledging that various factors may be involved.

According to Patra, an effective policy response should prioritize technological capital deepening, supported by long-term investments in research and development to foster a competitive innovation ecosystem. Additionally, there is a need for skill development through consistent educational achievements and training, as well as strengthening physical infrastructure.

The central bank, which has been actively combating high inflation, has raised the repo rate by 250 basis points since May of the previous year. However, in the June 6-8 meeting, the Monetary Policy Committee, led by the central bank, chose to maintain the current policy stance of gradually withdrawing from accommodative measures.

Also Read: AI Fixes Problems In A Boeing Plane Stranded In Magadan; Planes Departs For Mumbai

Patra emphasized the importance of central banks gaining a comprehensive understanding of productivity trends to accurately assess the economy’s position within the business cycle. This understanding is crucial for formulating suitable policy responses that support consistent and non-inflationary economic growth. By doing so, financial market confidence can be fostered, leading to improved overall flow of finance within the economy, according to the deputy governor.

Shruti Rag

Recent Posts

Hina Khan Hails 11 Years Of PM Modi’s Leadership; Highlights National Progress

As the nation marks 11 years under PM Modi's leadership, actress Hina Khan shares her…

4 hours ago

Subhash Ghai Hails PM Modi’s Transformative Vision For India

Subhash Ghai has praised PM Narendra Modi’s leadership for catalysing India’s growth and changing the…

5 hours ago

India & Central Asia Boost Rare Earth Cooperation At Delhi Meet

India and five Central Asian nations have agreed to deepen cooperation on rare earths and…

5 hours ago

PM Modi’s Beej Se Bazaar Tak Vision Reshapes Indian Agriculture

Prime Minister Modi has redefined Indian agriculture with the ‘Beej Se Bazaar Tak’ vision, transforming…

6 hours ago

EV Sales Cross 4% Mark In May; Signalling Steady Shift To Green Mobility

EV sales topped 4% of passenger vehicle retail in May 2025, signalling growing demand for…

6 hours ago

Self-Reliant Defence Industry Marks India’s Strategic Security Ascent

One year into Modi 3.0, reforms have reduced poverty, strengthened defence, and accelerated the digital…

6 hours ago