INSUBCONTINENT EXCLUSIVE:
an unprecedented contraction in 2020-21, dragged down by the COVID-19 pandemic, headline inflation was elevated for most part of the year
led by supply chain disruptions due to the pandemic and spikes in key food prices.These observations have been made by the central bank in
its annual report for 2020-21, which it released on Thursday.The onset of the second wave of Corona virus pandemic in the country, has
triggered a raft of revisions to growth projections, with the consensus gravitating towards the Reserve Bank's projection of 10.5 per cent
Q4.The pandemic itself, especially the impact and duration of the second wave, is the biggest risk to this outlook, the central bank has
noted in its annual report.Yet at the same time it has said that "upsides also stem from the capex push by the government, rising capacity
utilisation and the turnaround in capital goods imports
For April and early May 2021, available high frequency indicators present a mixed picture".While mobility and sentiment indicators have
moderated, several activity indicators have held their own and shown resilience in the face of the second wave, RBI has observed.On
albeit with an upside push from adverse base effects during February-March 2021."Monetary and credit conditions remained expansionary and
financial market conditions eased considerably on the back of abundant liquidity," it said further while reviewing the year gone by.Public
finances were impacted by a cyclical slowdown in revenues, which was exacerbated by Covid-19, while pandemic-induced fiscal measures pushed
up expenditure, it added further."On the external front, the sizeable contraction in imports relative to exports, under deep recessionary
conditions, led to a current account surplus; along with robust net capital inflows, this led to a large build-up of foreign exchange
reserves," the RBI said.GST collections crossed the Rs 1 lakh crore mark for the seventh consecutive month in April and notched up the
its accounting year from July-June to April-March.
