While Central and State Governments would have to deliver on easing these roadblocks and facilitating investments in the infrastructure sector, banks would also need to hone their credit appraisal, monitoring and risk management skills, keeping in view the long gestation period of infrastructure projects. This would ensure that the sector’s funding needs are met, while keeping the position of NPAs under stringent control.
The Council expects to keep interest rates at their present levels well past the horizon of the net asset purchases. Inflation, after falling slightly at the start of this year owing to the base effect associated with the temporary increase in energy commodity prices in 2017, is expected to rise gradually to levels consistent with the target in the second half of 2020.