The RBI released a report on currency and finance for the year 2021-22 on Friday in which it stated that it may take 12 years for the Indian ecomony to recover form the losses incurred during Covid pandemic.
It further stated that structural changes that have been rushed by the pandemic may take actually alter the course of growth in medium-term. RBI also claimed that the pandemic is a watershed moment for the economy.
“Sustained thrust on capital expenditure by the government, push to digitalisation and growing opportunities for new investment in areas like e-commerce, start-ups, renewables and supply chain logistics could in turn, contribute to step up the trend growth while closing the formal-informal gap in the economy,” the report noted.
The RBI further noted in the report, the pre-COVID trend growth rate works out to 6.6 per cent (CAGR for 2012-13 to 2019-20) and excluding the slowdown years it works out to 7.1 per cent (CAGR for 2012-13 to 2016-17). The output losses for individual years have been worked out to Rs 19.1 lakh crore, Rs 17.1 lakh crore and Rs 16.4 lakh crore for 2020-21, 2021-22 and 2022-23, respectively.
The Reserve Bank of India released the Report on Currency and Finance (RCF) for the year 2021-22 on Friday. The theme of the report is “Revive and Reconstruct” in the context of nurturing a durable recovery post-COVID and raising trend growth in the medium-term.
The blueprint of reforms proposed in the report revolves around seven wheels of economic progress viz., aggregate demand; aggregate supply; institutions, intermediaries and markets; macroeconomic stability and policy coordination; productivity and technological progress; structural change; and sustainability.
The report noted, “the pandemic is not yet over. A fresh wave of COVID has hit China, South Korea and several parts of Europe. However, various economies are reacting divergently ranging from a no-COVID policy in some jurisdictions (e.g., China, Hong Kong and Bhutan) on the one hand to those with relatively open borders and removal of internal restrictions (e.g., Denmark and the UK). In India, the restriction levels are being dynamically calibrated at local levels in response to the evolving situation.
(With ANI inputs)