RBI Cuts Real GDP Growth Projection To 9.5% For FY22 From 10.5% Earlier
Mumbai: While announcing the monetary policy, RBI Governor Shaktikanta Das announced that the projection of real GDP growth for 2021-22 has been revised to 9.5% because of the adverse impact of the second wave of coronavirus infections.
It is worth noting that this was the first Monetary Policy Committee (MPC) meeting after official data showed that the Indian economy contracted by 7.3 per cent in the last fiscal, due to the nationwide lockdown that has halted most economic activities.
More importantly, the latest meeting of key interest rates came at a time when the second wave of Covid-19 was showing signs of slowing down with several states reporting a fall in daily cases. In its April policy, the MPC had projected the Indian economy to grow at 10.5 per cent in 2020-21.
On inflation, RBI Governor Shaktikanta Das said retail inflation based on the Consumer Price Index (CPI) is likely to remain at 5.1 per cent during the current fiscal, adding elbow room to the recent fall in inflation, adding to the policy from all sides.
The RBI chief said the economy is likely to grow at 18.5 per cent in the first quarter, 7.9 per cent in the second quarter, 7.2 per cent in the third quarter and 6.6 per cent in the fourth quarter.
Das said: “The spread of COVID-19 infections in rural areas and the dent in urban demand pose downside risks. The devastation of the pandemic can be mitigated by accelerating vaccination campaigns and bridging gaps in healthcare infrastructure and critical medical supplies.
The sudden rise in Covid-19 cases and fatalities has impaired the nascent recovery that was underway but has not snuffed it out. The impulses of growth are still alive.
Looking ahead, a policy package to consolidate India’s position as vaccine capital of the world with leadership in the production of pharma products can change the Covid narrative, the RBI boss emphasised.
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