INSUBCONTINENT EXCLUSIVE:
NEW DELHI: The Monetary policy committee (MPC) of the Reserve Bank of India on Thursday said the rapidly spreading coronavirus may impact
and unfolding, as he made a case for preparing a contingency plan to deal with the situation and its impact on the economy.
The committee in
a statement also said the virus may impact tourist arrivals in India and global trade.
The death toll from coronavirus in mainland China
jumped by 73 to 563 today, with total confirmed infections standing at more than 28,000 in the country.
India has reported three confirmed
cases so far from Kerala, where nearly 2,000 people are under observation in hospitals and homes.
Domestic businesses have already started
feeling the coronavirus pinch
Chinese telecom gear maker Huawei India on Wednesday said it has suspended travel to and from China in view of deadly infection.
Many Indian
companies are already facing supply crunch, as China exports a number of important raw materials and components to tech and auto industries
Globally, a number of companies have shut operation in heavily affected counties.
Last week, Taiwanese tech major Asus said there will be a
temporary shortage of its gaming smartphone 'ROG Phone II' due to disruption in supply chain on account of the coronavirus outbreak.
MG
Motor India also forecast a hit on sales this month due to 's ignificant disruption' in supply chain from European, Chinese and other Asian
Tata Motors expects delays in some components could have an impact on the delivery schedule.
Analysts, however, see a mixed impact of the
Sumit Kalra of Target Investing said if factories and cities are in a lockdown for a longer period then it will create a positive situation
for companies that depend on those products as raw materials, especially, if imports are critical in nature and are irreplaceable in a short
for the likely adverse impact on growth prospects, but they recovered some of the losses in early February
Similarly, crude prices also took a hit as traders feared slump in demand in China, which is the largest importer.
In its last monetary
policy of FY20 on Thursday, RBI kept repo rate unchanged at 5.15, while keeping accommodative stance.
The MPC pegged India to grow at the
rate of 6 per cent in fiscal year 2021
The GDP may grow in the range of 5.5-6.0 per cent in the first half and 6.2 per cent in Q3FY21
The committee said that the rationalisation of personal income tax rates in the Union Budget 2020-21 should support domestic demand along
with measures to boost rural and infrastructure spending.
The committee said several high frequency indicators of services have turned
upwards in the recent period, pointing to a modest revival in momentum
Though, it added that the outlook was still muted.
