The Reserve Bank of India has recently released the June 2024 issue of its monthly Bulletin. This issue includes three speeches, three articles, and current statistics.
Articles in the June 2024 Issue
The three articles included in the June 2024 issue of the Reserve Bank Bulletin are as follows:
I. State of the Economy
According to the Bulletin, global growth remained resilient in the first quarter of 2024. Many central banks have adjusted their monetary policy stance to be less restrictive in response to falling inflation in their respective economies. In India, high-frequency indicators suggest that real GDP growth in the first quarter of 2024-25 is maintaining a similar pace to the previous quarter.
The prospects for agriculture are improving with the early arrival of the southwest monsoon. Headline inflation is gradually easing, driven by a sustained softening of its core component, although volatile and elevated food prices have interrupted the path of disinflation.
II. Financial Stocks and Flow of Funds of the Indian Economy 2021-22
This article, authored by Suraj S, Ishu Thakur, and Mousumi Priyadarshini, presents an analysis of the financial stocks and flows (FSF) during the 2021-22 period across different sectors of the Indian economy. The analysis provides insights into the interconnections between sectors by mapping the sources and uses of funds. The article also includes non-consolidated detailed statements based on the annual compilation cycle.
Some highlights from this article include:
- Households and financial corporations remained surplus sectors, accommodating the deficit of the general government and private non-financial corporations.
- With the recovery in domestic demand, the Indian economy returned to a net borrower status in 2021-22, primarily due to a reduction in net resource flows from other depository corporations (ODCs) and other financial corporations (OFCs), as well as lower funding from households and private non-financial corporations.
- Although the net financial wealth of the domestic sector moderated to 29.8 percent of GDP at the end of March 2022 compared to the previous year, it was still higher than the pre-pandemic position in 2019-20.
- The net financial wealth of households at the end of March 2022 was 93.5 percent of GDP, lower than the preceding year but higher than the pre-pandemic level in 2019-20.
III. India’s Deposit Insurance @60: Retrospect and Prospect
Authored by Ashutosh Yashwant Raravikar, Avijit Joarder, and Anup Kumar, this article discusses the history, achievements, and future agenda of India’s deposit insurance system. The deposit insurance system, established with the objectives of financial stability and protection of small depositors, has completed sixty years of existence.
The article highlights achievements such as enhanced coverage limits, speedy settlement of claims, revisions in premiums, a robust deposit insurance fund, prudent treasury management, and initiatives for depositor awareness. The future agenda includes aligning with international standards, speedier claim settlement, proactive treasury management, modernization of infrastructure, capacity building, adapting to fintech innovations, back-up funding arrangements, periodic review of coverage, and raising public awareness.
