RBI Governor Shaktikanta Das today said that India has seen some stabilisation in economic activity in the ongoing fiscal’s second quarter. He added that the economic recovery will be gradual, but some of the high-frequency indicators such as agriculture activity, manufacturing PMI, and private estimates of unemployment point to some stabilisation of economic activity in the second quarter. The RBI Governor also mentioned that the contraction in several other sectors is also simultaneously easing. However, the recovery is not yet fully entrenched and moreover in some sectors, the uptick which was noticed in June and July have leveled off, he added.
By all indications, the recovery is likely to be gradual as efforts towards the reopening of the economy are confronted with rising infections, Shaktikanta Das said. While India recorded a sharp decline in GDP in the first quarter, the RBI Governor highlighted that the global economy has suffered the sharpest contraction in living memory during April-June 2020 and the world merchandise trade fell over 18 per cent in the same period. However, he underlined that RBI remains battle-ready, and whatever measures are required will be taken up by the central bank.
5 different areas which would determine India’s ability to step up and sustain growth in medium-term
The RBI Governor said that the human capital in education and health; productivity; exports; tourism; and food processing and associated productivity gains are the five areas that would determine India’s ability to step up and sustain growth in the medium-term. Earlier in the month of July, he gave five major dynamic tips taking place in the Indian economy — fortune shifting in favour of the farm sector; changing energy mix in favour of renewables; leveraging information technology, ICT, and startups to foster growth; shifts in underlying supply and value chains; and infrastructure as a force multiplier of growth.