Covid-hit Indian economy to witness gradual recovery, says RBI Governor Shaktikanta Das

Covid-hit Indian economy to witness gradual recovery, says RBI Governor Shaktikanta Das

Reserve Bank of India (RBI) Governor Shaktikanta Das on Wednesday said the country’s economic recovery will be gradual as the impact of Covid-19 has still not subsided.

While addressing the FICCI National Executive Committee Meeting, Das said the economic recovery has not yet been fully entrenched and went on to add that the GDP data in the first quarter of FY21 is a reflection of how the pandemic disrupted the country’s economy.

As per data released by the government, GDP during the April-June quarter contracted 23.9 percent on account of the strict lockdown imposed by the government at the end of March to check the spread of coronavirus infections.

As per government data, GDP during the April-June quarter contracted 23.9 percent on account of the strict lockdown imposed by the government towards the end of March to check the spread of coronavirus infections.

"Recovery is not yet fully entrenched. In some sectors, the optic noticed in June and July appears to have leveled off. By all indications, the recovery is likely to be gradual as efforts towards reopening of the economy are confronted with rising infections," he said.

The RBI governor's comments come at a time when India's economy is going through a period of severe economic crisis. However, Das said that some high-frequency indicators have improved and indicate "some stabilization" of economic activity in the second quarter of the current fiscal year.

"Contractions in many other sectors simultaneously easing," he said.

Shaktikanta Das went on to say that the central bank has ensured adequate liquidity infusion to facilitate borrowing by the government at a low rate. Das also said that the central bank is "battle-ready" to take whatever steps needed to further stabilize the ailing economy.