Reserve Bank of India Governor Shaktikanta Das on Friday, 23 October, said that the risk of a second wave of the coronavirus can hamper the nascent recovery. His deputy MD Patra noted that it might take years to regain the output lost on account of the coronavirus pandemic.
India recorded 54,366 new coronavirus cases on Friday, taking its tally to 77,61,312. The death toll from the pandemic stands at 1,17,306. There are 6,95,509 active cases, 69,48,497 recoveries, and the recovery rate is 89.20 percent. The number of active cases fell below 7 lakh after two months.
“Primary among them is the risk of a second wave of COVID-19. Private investment activity is likely to be subdued, even as domestic financial conditions have eased significantly,” he noted.
In the first quarter of this fiscal, India’s GDP contracted by a whopping 23.9 percent due to the lockdown restrictions imposed to contain the spread of the coronavirus.
Globally, the disease has affected more than 4.16 crore people and killed 11,35,880 persons.
Patra said at the meeting of the Monetary Policy Committee on 9 October that while exports could contribute to growth, it is unlikely because the World Trade Organisation has projected a decline in world trade volume by 9.2 percent in 2020.
“For fiscal policy, it is the collapse of tax revenue – by 32 percent in the first quarter; consequently, the Centre’s revenue deficit during April-August is 121.9 percent of budget estimates,” he said, reported PTI.
The RBI predicted a decline of 9.5 percent in the Indian economy in 2020-2021.
The International Monetary Fund predicted that the Indian economy would contract by 10.3 percent in 2020-2021.
“Global trade is projected to collapse by 10% this year. You can explain that by just looking at the collapses in the individual economies – not so much because of trade restrictions and global supply chains,” IMF’s Chief Economist Gita Gopinath had told The Quint.
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