RBI bulletin sees uneven economic recovery
The Reserve Bank of India (RBI) on Monday said monetary and credit conditions were conducive for a durable economic recovery in the country.
However, the central bank cited multiple challenges on the global front, including faster policy normalisation by major central banks that could lead to the tightening of financial conditions which will suppress the growth impulses. The observations were made by an RBI bulletin for November.
According to the report, the Indian economy is differentiating itself from the global situation, which is marred by supply disruptions, stubborn inflation and surges of the infection (Covid-19) in various parts of the world.
The central bank added the domestic situation has brightened following the considerable dip in fresh infections and a rapid progress in inoculations.
The report warned the speed and pace of recovery remains uneven across different sectors of the economy. “The outlook remains overcast by the future course of the pandemic and global supply disruptions.’’
The RBI said mobility was rapidly improving, job market was recouping, while overall economic activity is on the cusp of a strengthening revival. In its October monetary policy, the RBI had retained its earlier projection of a 9.5 per cent real GDP growth in this fiscal.
The report said in October-November, with the onset of the festival season, both the Google and Apple mobility indices recorded a marked improvement. Electricity generation in the first 10 days of November remained comparable with those recorded a year ago as well as over the pre-pandemic levels.
There was an improvement in aggregate demand indicators, the report said.
The e-way bill generation in October has surpassed the pre-pandemic levels of February 2020, an indication of improved economic activity and movement of goods transport.
Some of the sectors such as construction is yet to catch up with its February 2020 levels as both steel consumption and cement production trailed below the baseline.
The aviation sector also saw a pick-up in both passenger and cargo traffic and as per CMIE’s employment statistics, the labour market recovery is almost complete with the number of workers employed in September-October approaching the levels seen in 2019.
The bulletin said the government is comfortably placed to achieve its tax revenue collection target for 2021-22.