International Journal of Marketing & Financial Management

International Journal of Marketing & Financial Management

Print ISSN : 2349 –2546

Online ISSN : 2348 –3954

Frequency : Monthly

Current Issue : Volume 13 , Issue 1
2025


ABSTRACT

Quantitative Easing (QE) has been widely castoff by RBI, particularly in advanced economies, as a tool for stimulating economic growth during periods of economic downturn or financial crises. However, India’s experience with QE-like measures has been more limited and tailored to the country’s specific economic context. This paper examines the effectiveness of such monetary interventions in India, focusing on their role in stabilizing the financial system, supporting liquidity, and promoting credit flow during times of stress, particularly the COVID-19 pandemic and post-demonetization period.

The analysis reveals that RBI’s unconventional monetary policy tools successfully injected liquidity into the banking system, maintained low interest rates, and alleviated short-term financial market stress. These measures helped reduce borrowing costs, facilitated government borrowing, and ensured the continued flow of credit to businesses and households. However, despite these 

positive outcomes, the long-term impact on economic growth has been limited. The liquidity interventions provided temporary stabilization but did not address deeper structural issues such as low private investment, high public debt, and sluggish industrial growth. Additionally, while inflation was contained, concerns about rising wealth inequality due to increased asset prices were highlighted.

Overall, this paper suggests that while QE-like measures have provided crucial short-term relief, they are not a panacea for India's long-term growth challenges. For sustained economic expansion, India must pursue structural reforms to improve productivity, foster private sector investment, and address systemic inefficiencies. The findings underscore the importance of complementing liquidity interventions with broader economic reforms to achieve sustained and inclusive growth.

Keywords: Quantitative Easing, Economic Growth, Monetary Policy, Financial Markets, Inflation, Unemployment etc