RBI Deputy Governor M D Patra has said India's GDP will be just one per cent above the pre-pandemic level even after the estimated 9.2 per cent growth in FY22, and this factor coupled with comfort on inflation make the RBI to continue with the accommodative monetary policy. Making it clear that India's slide on growth began in 2017, much before the pandemic, Patra said the country has lost up to 15 per cent of output forever, which has resulted in the loss of livelihoods as well.
He stated ‘India is in a comfortable position as far as inflation is concerned. And, since that is there, we have the headroom to support growth and we will do so because we are dealing with lost output, lost livelihoods.’ He mentioned that the 6.01 per cent headline inflation in January is the peak level and the same will decline to the RBI's target of four per cent by the December 2021 quarter.
On growth, he said India, which had one of the strictest lockdowns on entering the pandemic in 2020 that led to a nearly one-fourth contraction in the economy in Q1FY21, was the second worst-hit country after Peru. ‘And, if you knock out the fiscal stimulus, India exceeds the depression of Peru. So, we have dug out of the deepest recessions in the world,’ Patra added.
