RBI: Balance green fin push & credit risks
RBI
MUMBAI: Regulators and policymakers need to perform a "delicate balancing act" to successfully navigate the dual challenges of promoting
green finance
while managing heightened
credit risks
arising out of the transition to green technology that could threaten
financial stability
,
M Rajeshwar Rao
, deputy governor of
RBI
said, while speaking on green finance.
"The fact that the net-zero technologies driving the transition to decarbonisation, are at various developmental and evolving stages, itself signifies a significant increase in credit risks. Thus, there is a dichotomy wherein on one hand there is a need for incentivising green and
sustainable finance
and on the other there is an increase in inherent risks from encouraging such financing," he warned during his valedictory address at the Credit Summit 2025 in New Delhi.
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As a share of GDP, net FDI into India peaked at 2.65 per cent in 2009. According to a recent study, other preferred destinations for FDI, such as China or Vietnam, have also seen net FDI as a share of GDP fall in recent years. I have argued earlier that India needs productivism — to borrow from Dani Rodrik's reasoning — and must prioritise the dissemination of productive economic opportunities and investment capital across all sectors and segments of the workforce. This will help utilise effective capital mobility for job creation as well. All this requires a critical shift from fiscal management as a crisis-response to fiscal credibility as the default posture. Markets don't send warnings like this twice. Deepanshu Mohan is Professor of Economics and Dean, IDEAS, Office of InterDisciplinary Studies, Director, Centre for New Economics Studies, Jindal School of Liberal Arts and Humanities. Ankur Singh works at CNES
