Wage hikes will stimulate economy: RBI's Subir Gokarn
11 May 2010
Reserve Bank of India deputy governor Subir Gokarn yesterday said that he expects a ''sort of quasi-stimulus'' in the form of wage hikes in several sectors, which would help provide a demand-pull to the economy.
"Pay Commission wasn't a one-off phenomenon,'' he said, referring to the sixth pay commission, which awarded a sizeable pay hike to central government employees.
''RBI employees would get a wage hike within a few months' time and in other sectors, the hike would happen soon," Gokarn said, addressing a banking summit organised by Indian Chamber of Commerce in Kolkata.
Talking about liquidity in the system, he said, "There is enough liquidity. We need to manage it in non-disruptive way".
Gokarn also said the banking system is adequately capitalised.
