The Reserve Bank of India said the growth rate projections for the current fiscal year 2021-22 are being revised amid the second wave of the Kovid-19 pandemic. The Central Bank’s 2020-21 annual report, released Thursday, said that amid the amendments, the growth rate for 2021-22 is at 10.5 per cent of its previous estimate. The annual report says the past year has ‘hurt’ the economy. “The widespread discouragement in the second wave will help alleviate the alarming expectation in the wake of the vaccination campaign.”
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The revision of growth rate projections has begun with the second rate, the central bank said. The consensus for 2021-22 is the Reserve Bank’s previous estimate of 10.5%. The growth rate is estimated at 26.2 percent in the first quarter of the current fiscal year, 8.3 percent in the second quarter, 5.4 percent in the third quarter and 6.2 percent in the fourth quarter. The report notes that the epidemic is the biggest threat facing the landscape. Increased investment, increased utilization of government and imports of better capital goods have the potential to improve the economy.
The central bank believes that collective global efforts will certainly lead to better outcomes than individual countries’ struggle against infectious disease. The report states that the fiscal policy stance in 2021-22 depends on the macroeconomic situation. Policy mainly supports growth. The central bank said the rate of infection in the second wave was alarming. In the midst of such a rapid transition, the health infrastructure needs to be expanded in terms of capacity.
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The Reserve Bank said it was important for the government to follow a clear exit policy and create a financial buffer to be used when shaking up future growth, when the next growth and the economy are back in force. The report states that most cycle signs in April and early May indicate a mixed picture. In April, the Goods and Services Tax (GST) deduction was Rs. It shows that manufacturing and service production are continuous.
