GDP will rise 10.5 per cent in 2021-22:RBI governor

The RBI governor said the gross domestic product will rise 10.5 per cent in 2021-22. He said that inflation should be at 5.2 per cent for the current quarter, and 5.2-5 per cent for the first half of the next fiscaland that this would be within the limit of RBI’s policy mandate of keeping the consumer price index (CPI) inflation within 2-6 per cent.

In a major reform that will have a huge ramification in the coming days for India’s bond market and the savings habit of the nation, retail investors can now open gilt accounts with the RBI and trade in government bonds. The retail investors can take positions both in primary and secondary markets, RBI governor Shaktikanta Das said in his speech.

This is a game changer as far as retail participation in the bond market is concerned. Major efforts in the past failed to persuade retail investors to take positions in the government debt papers. They could do it via banks, and mutual funds, or through various indices.

However, if the gilt accounts are opened with the RBI and positions are taken directly in the market, retail investors will flock to the route, something that bond market experts have been suggesting for a long time.

This will not only help the government borrow Rs 12 trillion easily, as the investor base expands hugely, it will also channelise retail investors' money to fixed income guaranteed by the sovereign and facilitated by the RBI and expand the savings base in the country.

The fixed deposit products of banks, however, could be affected as people can directly invest their money in G-secs that offer similar or even better returns sometimesand the details of the scheme are yet to be known.