Since the assessment presented in the last month's Article, more evidence has been turned in to show that the Indian economy is pulling out of COVID-19's deep abyss and is reflating at a pace that beats most predictions, the RBI has said in a release. "Economic conditions continued to improve through November 2020 on the back of the uptick in agriculture and manufacturing activity. Financial conditions embodied in interest rates are perhaps at their easiest in decades. Although headwinds blow, steadfast efforts by all stakeholders could put India on a faster growth trajectory," the RBI has said.
According to the nation's central bank, COVID-19 pandemic has completely altered how policymakers monitor economic data in the context of rapidly evolving economic activity and diverging sub-national trends to undertake appropriate and swift policy responses.
On government finances first half review, the Reserve Bank of India believes the impact of economic downturn has been severe on the revenue side, while expenditure has largely held up.
"The silver lining is that the impact seems to have bottomed out in Q1:2020-21 with signs of recovery in Q2," the RBI has said.