<\/p>\n
Reserve Bank of India (RBI) governor Shaktikanta Das said the country\u2019s economic recovery will be gradual because of the unabated rise of coronavirus cases, but come what may, the central bank is \u201cbattle-ready\u201d to take all steps necessary to restore growth.<\/p>\n
The \u201cefforts towards reopening the economy are confronted with rising infections\u201d, Das said at a public event on Wednesday. \u201cHigh-frequency indicators of agricultural activity, the purchasing managing index (PMI) for manufacturing and private estimates for unemployment point to some stabilisation of economic activity in the second quarter, while contractions in several sectors are also easing,\u201d he said, adding that \u201cIndia\u2019s central bank stands battle-ready to take whatever steps are needed to be taken for the economy\u201d. RBI has said that the economy will continue to contract in the first half of the fiscal due to disruptions from Covid-19.<\/p>\n
The comments from the RBI governor are in sharp contrast to views expressed by the finance ministry\u2019s chief economic adviser, Krishnamurthy Subramanian, who predicted a V-shaped economic recovery although he maintained that it will be challenging to recoup losses from the recent economic contraction over the short term.<\/p>\n
Citing RBI\u2019s twin challenges of supporting growth while keeping inflation within range, Subramanian had said that recent indicators showed retail inflation was easing, potentially leaving room for the central bank to cut rates further.<\/p>\n
Das said global economic indicators such as manufacturing and services are showing signs of improvement, backed by policy stimulus by various governments, including India, where large surplus liquidity ensured mobilisation of resources at the lowest borrowing costs in a decade. \u201cBenign financing conditions and the substantial narrowing of spreads have spurred a record issuance of corporate bonds of close to \u20b93.2 trillion in 2020-21 up to August,\u201d Das said.<\/p>\n