Page 53 - Banking Finance May 2025

ARTICLE

Latin America: Brazil, Mexico, Chile Pillars of the Initiative:
Investment in highways, ports, and logistics.
Advantage:
PLI schemes to drive domestic manufacturing.
India's democratic model, transparent trade practices, and
competitive pricing make it an ideal partner for long-term Digital infrastructure (UPI, Aadhaar, ONDC) for scalable
growth.
economic cooperation.
Impact:
India's Demographic and Economic
These measures have triggered a multiplier effect on jobs,
Strengths exports, and investment, making India more resilient to
Youth as an Economic Driver external shocks.
India's workforce will continue to grow until 2057, while
China and Western economies face demographic decline. Conclusion: India's Time on the Global
This young population underpins both supply (labour) and Stage
demand (consumption).
Amid global trade tensions and shifting alliances, India is
poised to become a global economic leader. Tariff
Benefits:
differentials, demographic dividends, strategic reforms, and
Competitive labour costs.
strong trade diplomacy are converging to offer India a
Expanding middle class and domestic market. unique growth trajectory.

Fiscal Stability vs. U.S. Debt Concerns If India continues along this path-prioritizing infrastructure,
education, governance reforms, and global cooperation-it
India's fiscal prudence contrasts sharply with the U.S., where
federal debt ballooned to $36.2 trillion by 2024. With $7.6 could anchor the next phase of global economic leadership.
trillion maturing soon, the U.S. faces refinancing pressures.
In a world facing fragmentation and fiscal stress, India's
India, meanwhile, emphasizes capital expenditure over
combination of youth, pragmatism, and macroeconomic
subsidies, prioritizing long-term growth.
stability offers a compelling vision for inclusive and sustained
growth.
Aatmanirbhar Bharat and Infrastructure
Push Source:
The Aatmanirbhar Bharat initiative, launched in 2020, WTO Dispute Settlement Database,
promotes self-reliance in sectors like defence, electronics, https://www.worldbank.org/, https://www.imf.org/,https://
and clean energy. www.statista.com/, organiser.org

RBI to Inject Rs. 40,000 Crore into Banking System via Gilt Purchases

The Reserve Bank of India (RBI) will conduct its third open market operation (OMO) of the fiscal year by purchasing
government securities worth Rs 40,000 crore on April 17. The central bank earlier conducted OMO purchases worth
Rs 20,000 crore each on April 3 and April 8.
The liquidity infusion aligns with RBI's commitment to inject liquidity equivalent to 1% of the net demand and time
liabilities (NDTL) into the banking system. Given the current NDTL of about Rs 250 lakh crore, the total targeted
infusion is around Rs 2.5 lakh crore, fund managers said.

Since January 2025, RBI has injected approximately Rs 7 lakh crore into the system. The liquidity measures, com-
bined with two repo rate cuts in February and April, have led to a decline of 20-25 basis points in benchmark 10-year
government bond yields, easing borrowing costs for banks and NBFCs.

48 | 2025 | MAY | BANKING FINANCE