NEW DELHI: The Reserve Bank of India reiterated that vaccination will shape the economic recovery of the country. The economy has the resilience and the fundamentals to bounce back from the pandemic and unshackle itself from pre-existing cyclical and structural hindrances, it noted.
In a State of Economy article, the Bank has reiterated that there is a need to ensure the recovery is built on solid foundation of business investment and productivity growth. Life- and work-style transformation such as increased remote work and online shopping may likely to endure. RBI has predicted that digital technology, biomedical science and technologies that address various challenges to sustainability, especially those pertaining to climate change will have the greatest growth potential in the coming decade.
RBI has estimated that the Second Wave of Corona Pandemic may cause a consolidated Loss of about Rs. 2 lakh crore in FY 2021-22. Moreover, this wave has fanned into smaller cities and villages, sapping rural demand. RBI has said that, the support from government spending may also moderate from the extraordinary expansion undertaken last year. On the brighter side, several aspects of aggregate supply conditions such as agriculture and contactless services are holding up amidst pandemic protocols.
Industrial production and exports have surged on strong base effects, but there is also evidence of positive momentum.
