Bank of India strategic economic policies impact on poverty
WASHINGTON: Humanitarian organizations measure poverty in India based on the number of individuals living under a certain income level. Usually considered less than a dollar a day. Central banks, like the Reserve Bank of India (RBI,) look at the quantitative analysis of aggregate numbers. This is done by evaluating gross domestic product (GDP,) unemployment rate, disposable income and the all too important value of net exports. In short, the Bank of India is monitoring strategic economic policies impact on poverty.
Analyzing economic performance, as opposed to assessing the number of poor is the most accurate policy design tool. In other words, the measures of economic output and production determine how wealthy a nation is. In turn, the amount of growth determines the strength of the overall economy and worth of a currency compared to its investment quality in relation to other nations.
There is individual poverty and there is economic poverty.
Economic poverty is determined in comparison to other economies around the world and is based on units of economic production. Namely GDP.
Individual poverty is the disparity between the level of average standard living conditions and the number of deviations below that standard baseline.
Therefore, nations with high economic poverty, or low GDP growth, have greater instances of high individual poverty. Nations with low economic poverty, or high GDP growth, have higher living standards and fewer individuals in the high poverty category i.e. below the median.
As a result curves of the income distribution skew to the right and the other to the left of the point of central tendency. Moreover, heteroskedasticity in the population or inequity in variability is the direct result of economic performance and central bank planning.
Undoubtedly, individual poverty is highest in countries with low economic growth.
To improve economic growth, the Reserve Bank of India employed a key set of monetary strategies, banking reforms and socio-economic policy measures designed to improve broad based production levels and fuel overall consumption.
Several of these key strategies, aimed at targeting the lending structure and stimulating infrastructure development, are detailed as follows:
Reserve Bank of India key economic policies 2016 
- Bestow greater “Governance Autonomy” to banks.
- Require orderly succession plans.
- Fraud Registry and a Quick Response Team set up at RBI Charter of customer Right
Reserve Bank of India key economic policies 2014 
- Fiscal consolidation, stronger monetary policy framework, and better policy implementation. A
shift in repayment schedule for equal or shorter duration.
- The RBI has also allowed the banks to finance long-term projects with an option to refinance them periodically.
Under the scheme also popularly called the 5/25 scheme, banks can, for example, lend for a 25-year project with an option to rollover the loan every five year.
- IDFs are expected to take over a significant volume of the existing bank debt and thereby release funds for fresh lending by the banks for infrastructure projects.
- RBI to facilitate the flow of funds to the sector. In order to ensure adequate credit flow to infrastructure sector and to the affordable housing needs of the country.
Reserve Bank of India key economic policies 2012 
- Establish a policy of social banking: one where the rich subsidize the provision of financial services to the poor and where banking business is oriented towards serving the masses instead of exploiting them.
- Establish a committee to develop accessible and affordable financial services for consumers outside presently outside the banking network, (i.e. the poor).
Reserve Bank of India key economic policies 2010 
- Technology and digital infrastructure development: Interbank Mobile Payment Services (IMPS),
- Enhance the daily cap on both funds transfers and transactions involving the purchase of goods and services to Rs.50,000.
Indian Finance Minister Hints at 9+ GDP Growth
The impact on India’s poor, as a result of these policy reforms, is altogether positive. The strategies improved economic growth considerably. India’s GDP growth for the past decade topped out at 9.2 percent in 2016. (source: tradingeconomics.com) This is practically double-digit growth and a significant economic accomplishment.
In addition, India’s wage growth increased. (source: tradingeconomics.com) Providing more income for consumption lifts economic prospects of the entire population. Food and housing prices increased simultaneously. Mostly, attributed to better quality. Present estimates, however, indicate that 28 percent still live in severe poverty. So there is more work to be done
- Special Address by Shri S.S.Mundra, Deputy Governor, Reserve Bank of India at India Banking Reforms Conclave 2016 organized by Governance Now in Mumbai on August 24,2016.
- Economic Outlook and Role of Monetary Policy in funding Infrastructure projects
(Address by Shri S. S. Mundra, Deputy Governor, Reserve Bank of India at ‘Citi’s Investor Summit: India Poised for Higher Growth’ in New Delhi on November 17, 2014)
- Session Keynote Address delivered by Dr. K. C. Chakrabarty, Deputy Governor, Reserve Bank of India at the 2nd FT-YES Bank International Banking Summit at Mumbai on October 15, 2012. Assistance provided by Shri R.K. Jain and Shri Bipin Nair in preparation of this address is gratefully acknowledged.
- Remarks by Smt Shyamala Gopinath, DG, RBI at the inauguration of Inter-Bank Mobile Payment Service of the National Payment Corporation of India at Mumbai on November 22, 2010
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