The economy is healing but still emerging from a deep economic contraction: RBI

Bombay: The Indian economy may be on the mend, but it is still emerging from one of the deepest contractions to hit a large economy during the pandemic, the Reserve Bank of India (RBI) said in its monthly newsletter.

The October 2021 RBI Bulletin noted that India was among the first to be affected and our recovery started late, around October-November 2020.

“In the second wave, we did not impose a nationwide lockdown, but daily infections of over 400,000 were the highest in the world at the time and this clearly moderated the recovery that was underway. until there.”

“Therefore, political support for a sustainable and inclusive recovery may be needed longer. In particular, the choice of the policy mix will need to be carefully considered and sensitive, as employment is expected to weigh on the economy. recovery, people who have lost income and jobs, and those who have jobs have lost their purchasing power. “

The bulletin noted, however, that hiring prospects have already improved ahead of the festivals, with entry-level hires increasing at the fastest rate.

“The IT industry is the leader in terms of intent to hire, followed by education services, healthcare and pharmaceuticals. India will need policies that channel these energies to regain the demographic dividend. We can do it – recent outlook updates cite strong fundamentals, downside risks of negative feedback between the real economy and the financial system, high capital cushions and plentiful liquidity. “

“The time has come to put India on a new trajectory of sustainable and inclusive growth. After all, October marks the end and the beginning of things, a symphony of permanence and change.”

In addition, the bulletin pointed out that the Monetary Police Committee’s appeal on inflation proved correct, with lower-than-expected food prices spurring further disinflation of the stock for closer alignment with the stock market. the goal.

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