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Indian Economy to Overcome Covid-19 Losses Only in FY35: RBI

The Reserve Bank of India, in a new report, says, it will take nearly 15 years for the country’s economy to “overcome the losses” it has incurred during the pandemic.

The Indian economy could take more than a decade to overcome the losses due to Covid-19 disruptions, says the Reserve Bank of India’s latest report on currency and finance. The report also projected that the country lost more than Rs 50 lakh crore in output in the past three years.

“India is expected to overcome COVID-19 losses in 2034-35,” the report states.

Calling the Covid-19 pandemic a watershed moment, the report said, the perturbations from repeated waves of COVID-19 pandemic came in the way of sustained recovery.

In monetary terms, the output losses assumed by the RBI’s research team in its estimates are ₹19.1 lakh crore for FY21, ₹17.1 lakh crore for FY22 and ₹16.4 lakh crore for FY23.

“Taking the actual growth rate of -6.6 percent for 2020-21, 8.9 percent for 2021-22 and assuming growth rate of 7.2 percent for 2022-23, and 7.5 percent beyond that, India is expected to overcome COVID-19 losses in 2034-35,” the report, released on April 29, said.

The report, themed Revive and Reconstruct, in the context of nurturing a durable post-pandemic recovery and raising trend growth in the medium-term, does not reflect the views of the central bank itself but of the contributors, who are part of its Department of Economic and Policy Research.

Meanwhile, the latest World Economic Outlook report of the International Monetary Fund (IMF) pegged India’s growth rate for FY24 at 6.9 percent. The RBI’s Monetary Policy Report, released on April 8, also said structural models indicated GDP growth in FY24 might be 6.3 percent.

India’s real GDP in FY22 is estimated to be ₹147.54 lakh crore.

Governor Shaktikanta Das, in the foreword to the report, said it was not sufficient to just stabilise the economy and return it to its pre-first wave path. The task at hand, he said, was to create a “virtuous cycle of greater opportunity” for entrepreneurs, businesses, and the fiscal authority.

 

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