GET Stock QuotesNews18 APP
News18 English
cricketnext
»
1-min read

Niti Aayog's Arvind Panagriya Says Liquidity Issues to Stay For 3 Months

The problem is being gradually solved, liquidity is being put into the system back and at the pace at which we're going, I imagine that might be maximum a quarter during which this shortage will stay," he said at an Asia Society event here.

Press Trust Of India

Updated:November 25, 2016, 10:36 PM IST
facebookTwittergoogleskypewhatsapp
Niti Aayog's Arvind Panagriya Says Liquidity Issues to Stay For 3 Months
New Rs 500 and Rs 2000 currency notes (Original image: Reserve Bank of India. Modified by News18.com)

New Delhi: Niti Aayog Vice-Chairman Arvind Panagariya on Friday acknowledged that the demonetisation move will impact economic activity and growth due to lack of liquidity in the system which could be in short supply for three months.

"In the short run, you have a liquidity crunch. It is going to impact economic activity and it is also happening.

The problem is being gradually solved, liquidity is being put into the system back and at the pace at which we're going, I imagine that might be maximum a quarter during which this shortage will stay," he said at an Asia Society event here.

Stating that the liquidity situation is better now than it was a fortnight ago after Prime Minister Narendra Modi announced the surprise move to scrap Rs 500 and Rs 1,000 notes, Panagariya said the last month within the quarter will see a small shortage of liquidity.

Speaking a day after former prime minister Manmohan Singh's statement about impact of up to 2 percentage points on growth, Panagariya said, "I think it's a matter of a quarter and how much impact on the growth rate that happens in this quarter is anybody's estimate."

He said the exercise has positives like getting a lot of money into the formal financial system, and the increase in deposits will enhance financial intermediation in the economy and make it an "exciting quarter" for financial firms.

Panagariya said the smooth flow of vehicles due to a limited period toll waiver and zero hassles from policemen looking for bribes will also be of help.

He, however, parried the question when IDFC Bank's chief Rajiv Lal flagged concerns over banks' NPAs as toll road companies do not pay up. "What is more important, economic growth or asset quality?" Panagariya asked.

Read full article
Next Story
facebookTwittergoogleskypewhatsapp
Most Active
Company Price Change %Gain
Divis Labs 942.80 +79.55 +9.22
Reliance 847.15 +8.55 +1.02
Tata Steel 687.65 +11.25 +1.66
Axis Bank 519.45 -1.30 -0.25
ICICI Bank 290.55 -4.10 -1.39
Company Price Change %Gain
Bank of Baroda 148.40 +4.10 +2.84
Divis Labs 942.75 +78.90 +9.13
Magma Fincorp 180.35 -2.55 -1.39
Bombay Dyeing 202.75 +9.45 +4.89
Adani Ports 410.00 +4.10 +1.01
Top Gainers
Company Price Change %Gain
Dr Reddys Labs 2,314.70 +73.15 +3.26
Bank of Baroda 148.35 +3.80 +2.63
Tata Steel 687.65 +11.25 +1.66
ITC 271.55 +3.70 +1.38
ONGC 167.70 +1.80 +1.08
Company Price Change %Gain
Dr Reddys Labs 2,313.60 +74.50 +3.33
Tata Steel 687.65 +11.10 +1.64
ITC 271.20 +3.40 +1.27
SBI 270.55 +2.75 +1.03
Wipro 292.00 +3.10 +1.07
Top Losers
Company Price Change %Gain
BPCL 494.30 -12.60 -2.49
Hero Motocorp 3,856.05 -88.20 -2.24
Tata Motors 414.80 -8.85 -2.09
Sun Pharma 505.50 -10.30 -2.00
Ambuja Cements 279.90 -5.20 -1.82
Company Price Change %Gain
Hero Motocorp 3,858.10 -90.50 -2.29
Tata Motors 415.50 -8.40 -1.98
Sun Pharma 506.45 -10.15 -1.96
HUL 1,258.70 -21.20 -1.66
ICICI Bank 290.80 -3.55 -1.21

Live TV