Lockdown right time to reset India's financial reforms agenda: Mark Matthews
According to Matthews, India’s real economic problem remains its financial system.
By ETMarkets.com |
BCCL
NEW DELHI: Mark Matthews of Julius Baer on Thursday termed India's ongoing lockdown measures to contain the coronavirus outbreak as “draconian”, but said it would be a worthwhile investment if these measures succeed.
He said the shutdown could be a catalyst for resetting the agenda in financial markets reforms. "While the 21-day lockdown in India has caused much distress, especially to the migrant workers, it is also the time for a reset of financial market reforms,” Matthews said. The focus in the financial markets has so far been “on punishing malfeasance rather than recapitalising the system.”
Matthews, Head of Research for Asia at the global financial services firm, said data suggests India has so far “dodged the bullet” with the virus, and there is no anecdotal evidence of Wuhan-like healthcare disasters.
With 235 more people being confirmed positive for the coronavirus in last 24 hours, the number of Covid-19 cases in the country climbed to 2,069 and the death toll hit 53 as of Thursday evening, PTI reported.
“The government has adopted one of the most draconian containment measures in the world. This has caused much distress to the migrant worker community, and small and medium sized enterprises will no doubt be hit, as the country faces its first quarter of negative growth in over two decades. Yet, if it succeeds in suppressing the virus in this country of 1.3 billion people, it will have been a worthwhile investment,” Matthews said.
He suggested that RBI should let the rupee fall in order to do more.
According to Matthews, India’s real economic problem remains its financial system, weighed down by under-capitalisation of state-owned banks, and lending scandals in the private banks and non-bank financial companies.
He said the shutdown could be a catalyst for resetting the agenda in financial markets reforms. "While the 21-day lockdown in India has caused much distress, especially to the migrant workers, it is also the time for a reset of financial market reforms,” Matthews said. The focus in the financial markets has so far been “on punishing malfeasance rather than recapitalising the system.”
Matthews, Head of Research for Asia at the global financial services firm, said data suggests India has so far “dodged the bullet” with the virus, and there is no anecdotal evidence of Wuhan-like healthcare disasters.
With 235 more people being confirmed positive for the coronavirus in last 24 hours, the number of Covid-19 cases in the country climbed to 2,069 and the death toll hit 53 as of Thursday evening, PTI reported.
“The government has adopted one of the most draconian containment measures in the world. This has caused much distress to the migrant worker community, and small and medium sized enterprises will no doubt be hit, as the country faces its first quarter of negative growth in over two decades. Yet, if it succeeds in suppressing the virus in this country of 1.3 billion people, it will have been a worthwhile investment,” Matthews said.
He suggested that RBI should let the rupee fall in order to do more.
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According to Matthews, India’s real economic problem remains its financial system, weighed down by under-capitalisation of state-owned banks, and lending scandals in the private banks and non-bank financial companies.
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