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Annual Policy Statement for the Year 2010-11
-Announced on the 20th April 2010 by Dr. D. Subbarao, Governor, Reserve Bank of India

Dr. D. Subbarao, Governor, in a meeting with Chief Executives of major commercial banks today presented the Annual Policy Statement for the Year 2010-11.

The Monetary Policy for 2010-11 is set against a rather complex economic backdrop. Although the situation is more reassuring than it was a quarter ago, uncertainty about the shape and pace of global recovery persists. Private spending in advanced economies continues to be constrained and inflation remains generally subdued making it likely that fiscal and monetary stimuli in these economies will continue for an extended period. Emerging market economies (EMEs) are significantly ahead on the recovery curve, but some of them are also facing inflationary pressures.

2. India’s growth-inflation dynamics are in contrast to the overall global scenario. The economy is recovering rapidly from the growth slowdown but inflationary pressures, which were triggered by supply side factors, are now developing into a wider inflationary process. As the domestic balance of risks shifts from growth slowdown to inflation, our policy stance must recognise and respond to this transition. While global policy co-ordination was critical in dealing with a worldwide crisis, the exit process will necessarily be differentiated on the basis of the macroeconomic condition in each country. India’s rapid turnaround after the crisis induced slowdown evidences the resilience of our economy and our financial sector. However, this should not divert us from the need to bring back into focus the twin challenges of macroeconomic stability and financial sector development.

3. This statement is organised in two parts. Part A covers Monetary Policy and is divided into four Sections: Section I provides an overview of global and domestic macroeconomic developments; Section II sets out the outlook and projections for growth, inflation and monetary aggregates; Section III explains the stance of monetary policy; and Section IV specifies the monetary measures.Part B covers Developmental and Regulatory Policies and is organised into six sections: Financial Stability (Section I), Interest Rate Policy (Section II), Financial Markets (Section III), Credit Delivery and Financial Inclusion (Section IV), Regulatory and Supervisory Measures for Commercial Banks (Section V) and Institutional Developments (Section VI).

4. Part A of this Statement should be read and understood together with the detailed review in Macroeconomic and Monetary Developments released yesterday by the Reserve Bank.

Part A. Monetary Policy

I. The State of the Economy    Read full text

II. Outlook and Projections    Read full text

III. The Policy Stance    Read full text

IV. Monetary Measures   Read full text

Part B. Development and Regulatory Policies

I. Financial Stability    Read full text

II. Interest Rate Policy    Read full text

III. Financial Markets    Read full text

IV. Credit Delivery and Financial Inclusion    Read full text

V. Regulatory and Supervisory Measures for Commercial Banks    Read full text

VI. Institutional Developments   Read full text

An analytical review of macroeconomic and monetary developments was issued a day in advance as a supplement to this Statement, providing the necessary information and technical analysis with the help of charts and tables. ...Click Here For Macro economic and Monetary Developments : 2009-10

....Click Here For Highlights of Annual Policy Statement for the Year 2010-11

Mixed reactions from Banks, Economists, India Inc on RBI Annual Policy ....Click Here

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