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Indian economy has exhibited stronger-than-expected rebound: RBI governor

Reserve Bank of India (RBI) Governor Shaktikanta Das said on Thursday that the country’s economy has exhibited a stronger-than-expected rebound, but there is a need to be watchful of demand sustainability after the festive season.

His remarks come a day before the government is scheduled to release gross domestic product (GDP) data for the July-September period, as the economy is on track to register its first annual contraction in more than four decades. 

 

“Many COVID-19 relief measures have been taken proactively… Increased interaction with markets helped us take measures to tackle the coronavirus pandemic,” the RBI Governor said, speaking at the annual day event of Foreign Exchange Dealers’ Association of India (FEDAI).

Earlier this month, the government announced a third set of measures, worth ₹ 2.65 lakh crore, as part of its Atmanirbhar Bharat series of announcements aimed at rescuing the economy out of a historic contraction caused by the coronavirus pandemic.

Those measures took the total monetary and fiscal aid for the economy’s battle against a COVID-19-led slowdown to ₹ 29.88 lakh crore, which Finance Minister Nirmala Sitharaman said was equivalent to about 15 per cent of the country’s gross domestic product (GDP).

The Atmanirbhar Bharat 3.0 stimulus package included additional funding for real estate developers and contractors, fertiliser subsidies, a new employment scheme and additional spending on the rural jobs scheme, among other initiatives.

“Our efforts have been at the forefront. The economy has shown a stronger-than-expected pickup in momentum. Need to be watchful of demand sustainability post festivals,” the RBI Governor added.