Lack of financial liquidity faced by firms, other challenges to the economic and the financial system in the wake of the Covid-19 pandemic outbreak were the agenda for the Financial Stability and Development Council (FSDC) meeting.
The Central Finance minister Nirmala Sitharaman will chair the meeting. Other relief measures under the Rs 21 lakh crore package, announced by the Government of India, are also likely to be discussed prominently in the deliberations of an FSDC meeting.
The country is facing a ravaged economy and the FSDC meeting comes at the right time of unprecedented crisis. The financial system is hurt and the cash-flow of businesses is dented.
The Reserve Bank of India has already forecast a contraction in FY21. Some analysts have warned of GDP shrinking by up to 5.2%.
Crisil Ratings projected a 5% contraction in real GDP in FY21, warning that a ‘catch-up to the pre-crisis level of GDP growth will not be possible in the next three fiscals despite policy support”.
Apart from the finance minister and top officials of finance and corporate affairs ministries, financial-sector regulators — RBI governor Shaktikanta Das, Irdai chief Subhash Chandra Khuntia, Sebi chairman Ajay Tyagi, and IBBI chairman MS Sahoo—would also be present in the FSDC meeting.