Prospects brightening for economy as second Covid-19 wave wanes: RBI bulletin
The Reserve Bank of India (RBI) in its latest article on the state of the economy, published in the September bulletin, has said prospects are brightening for the Indian economy achieving ‘escape velocity’ from the pandemic as the second wave of COVID-19 wanes and preparedness for future remains on war-alert status. It said aggregate demand is gaining firmer ground, while on the supply side, IIP and core industries mirror improvement in industrial activity and services sector indicators point towards sustained recovery.

It mentioned ‘In August, we believe that India passed a turning point which consolidates and thrives come September.’ Further, it said the trajectory of inflation is shifting down more favourably than anticipated. It stated as pandemic scars heal and supply conditions are restored with productivity gains, a sustained easing of core inflation can be expected, which will reinforce the growth-supportive stance of monetary policy.

Besides, the article said domestic economic conditions rounded a turning point in August as growth impulses gathered momentum with the progressive opening up of the economy and scaling up of the vaccination drive. On aggregate demand, it said e-way bills remained above pre-pandemic levels of February 2020, signalling higher GST collections going forward. Besides, retail sales of motor vehicles registered growth over a low base in August last year; railways freight continued to be impressive; and fast-moving consumer goods sector surged, among others. Also, merchandise exports continued with their stellar performance.