Recent coronavirus infection cases are increasingly at risk of weakening the landscape of 2021–22.
Global credit rating agency Fitch Ratings and the Reserve Bank of India both said in their separate reports on Thursday that the transition between the second wave of coronavirus could quickly delay recovery in the gross domestic product. Fitch rated BBB for India. It also said that the rapid recovery in Coronavirus cases may delay the recovery in the gross domestic product (GDP) but this will not derail the economy’s development. Fitch has retained the negative scenario. This reflects the long-term uncertainty about debt growth.
The rating agency said that we estimate the GDP growth rate to be 12.8 percent in FY 2021-22, which will soften to 5.8 percent in 2022-23. The growth rate is projected to decline by 7.5 percent in FY 2020-21. He said that although the recent coronavirus infection cases are at risk of rapidly weakening the scenario of 2021-22. Rapid revival may be delayed in cases of infection, but there is no fear of derailment of the economy’s growth. Fitch believes that epidemic-related sanctions will be locally limited and will be less stringent than the nationally imposed lockdown in 2020. At the same time, the vaccination campaign is being accelerated.
Uncertainty overgrowth scenario due to restrictions in Covid cases
Reserve Bank Governor Shaktikanta Das and other members of the Monetary Policy Committee supported no change in the policy rate and the increase in view of uncertainties due to increasing cases of Covid-19 infection and lockdown being imposed locally for its prevention The decision to maintain a liberal approach to giving was made by consensus. This information came from the details of the meeting of the Monetary Policy Committee released on Thursday.
The Governor said during the three-day meeting of the MPC that at this time economic revival needs to be effectively protected so that it is comprehensive and sustainable. According to the details of the MPC (Monetary Policy Committee) meeting released by the central bank, he said that there has been uncertainty in the growth scenario in various parts of the country due to an upsurge in the cases of Covid-19 infection and local restrictions for its prevention.
Das said that in such an environment, monetary policy should remain liberal to support, pursue and strengthen the revival. We need to maintain the pace of growth in FY 2021-22. Other MPC members are Michael Debavrat Patra (RBI Deputy Governor), Mridul K Sagar (RBI Executive Director) and three external members. Shashank Bhide, Ashima Goyal and Jayant R Verma. All of them voted in favor of keeping the repo rate at 4 percent. Patra said that unless revival is strong and sustainable, monetary policy should be supportive to the economy.
