According to RBI’s first-ever published nowcast, India’s economy probably shrank for a second straight quarter pushing the country into an unprecedented recession. The report was made by a team of economists including Michael Patra, the central bank’s deputy governor in charge of monetary policy.
RBI report is an estimate based on high-frequency data.
The Reserve Bank of India shows that the GDP contracted 8.6% in the quarter ended in September. The economy had slumped about 24% in April to June.
The economy in Recovery and $5 trillion economy
2. RBI’s report is in direct contrast to PM Modi and Nirmala Sitharaman’s grand assurances that the economy is in recovery despite the pandemic.
Just 5 days ago, Prime Minister Narendra Modi while addressing a virtual global investor round table said that India’s economy has been stable and all sectors are now looking up. One understands the positive pitch that needs to be made while inviting investors but PM Modi and his government have been in denial about the state of the economy that is in free fall since the implementation of its disastrous demonetisation policies that have destroyed small and medium business and the unorganised sector.
In an interview with Economics Times, Prime Minister Narendra Modi believes India can still achieve $5 trillion economy target by 2024 despite Covid-19. In the interview, he said that he will continue with the reforms in labour and agriculture that his government is pushing aggressively.
