The Reserve Bank of India (RBI) has revised the real GDP growth projection for FY21 upwards to (-) 7.5 percent on the back signs of faster recovery after the narrowing of the GDP contraction for the July-September, along with hopes of Covid-19 vaccines.
This is an upward revision from the earlier estimate of (-) 9.5 percent.
In his video statement post, the Monetary Policy Committee’s (MPC) meet, RBI Governor, Shaktikanta Das on Friday said that the growth will enter the positive zone in the third quarter of the current fiscal with a projection that GDP may grow at 0.1 percent and the growth will further improve in Q4 to 0.7 percent.
The RBI had projected that in H1 of FY22, the GDP growth maybe around 6.5 percent. The RBI Governor said that the rural economy still continues to lead the overall recovery and the urban demand is also accelerating.
Noting that the economic recovery for India has been faster than anticipated, he said that the road to recovery is still clouded by the rise in Covid cases in patches across the country, which may lead to local restrictions, obstructing economic activities.
Das announced that the MPC has decided to keep the repo rate unchanged at 4 percent while keeping the accommodative stance intact.
He assured that the committee will continue with the accommodative stance at least for the current financial year.
