On Thursday, the Reserve Bank of India (RBI) released its monthly bulletin for June 2021. RBI stated that the second wave of coronavirus may result in the loss of Rs 2 lakh crore during the current financial year in its monthly bulletin.
The Reserve Bank of India has claimed that despite cautious optimism is returning the Indian economy wrestled during the second wave of the Coronavirus pandemic, it has assessed that the second wave has basically hit domestic demand hard.
In this monthly bulletin, the central bank focused on the overall state of the Indian economy, India’s sovereign yield curve, and the country's fiscal framework.
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The central bank commented on the state of the economy and said that the second wave has hit domestic demand and several aspects of supply condition. In the macroeconomic view of India’s sovereign yield curve, RBI has found that the value of the curve was not constant and it has witnessed a downward shift from the second quarter of 2019.
The RBI has also noted that the coronavirus pandemic has necessitated an overwhelming fiscal response from the governments globally.
RBI’s statement read, “Going forward, the speed and scale of vaccination will shape the path of recovery. The economy has the resilience and the fundamentals to bounce back from the pandemic and unshackle it from pre-existing cyclical and structural hindrances.”
It further said, “As India unwinds the fiscal stimulus and embarks on the path of fiscal adjustment, it is necessary to emphasize ‘how' over ‘how much'. This article proposes a few quantifiable indicators, i.e. ratios of revenue expenditure to capital outlay and revenue deficit to gross fiscal deficit along with threshold levels for them, that can be suitably blended into the fiscal fabric for a sustainable growth trajectory.”