New Delhi: In its monthly bulletin for June 2021, the Reserve Bank of India (RBI) estimated a loss of Rs 2 lakh crore in output during the current fiscal year pertaining to the second wave of coronavirus pandemic.
While talking about the struggle of the economy to wrestle the second wave, the central bank said that while the second wave has hit domestic demand pretty hard, on the brighter side, several aspects of aggregate supply conditions - agriculture and contactless services are holding up well, while industrial production and exports have surged compared to last year amidst pandemic protocols.
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"Going forward, the speed and scale of vaccination will shape the path of recovery. The economy has the resilience and the fundamentals to bounce back from the pandemic and unshackle itself from pre-existing cyclical and structural hindrances," it said.
Giving more details about the economic impact the second wave has had, RBI said that there has been a significant decline in the deposits, indicating a clear drop in household savings as compared to the first wave.
“While Covid has tested the limits of flexibility in fiscal policy frameworks in India as in the rest of the world, it has offered unique opportunity to redefine fiscal policy in a manner that emphasises ‘how’ over ‘how much,” the report said.
Several agencies, including RBI have already lowered their growth expectations for the fiscal year. In RBI’s revised GDP forecast in the latest monetary policy estimates, it slashed growth projections from 10.5 percent to 9.5 percent. The state of the economy report released on Wednesday said the projection was on the assumption that real GDP will grow by 18.5 percent in the first quarter which is on a much lower base as compared to last year.