A protracted lockdown might presumably push million of Indians into the “margins of subsistence”, former RBI Governor Duvvuri Subbarao mentioned on Sunday whereas anticipating a ”V” curved restoration as soon as the COVID-19 disaster ends and the turnaround in India to be sooner than some economies. He was taking part in a webinar on “History repeats – but differently- Lessons for the post Corona World,” organised by the Manthan Foundation right here, wherein former Deputy Governor of RBI Usha Thorat took half.
“Because most analysts believe that this year India will actually have negative growth or growth will contract. We must remember that even ahead of the crisis two months ago our growth slowed. Now it has completely stopped. Last year growth was five per cent. Just imagine, five per cent growth last year and we are going to negative or zero growth this year, a decline of five per cent growth,” he mentioned.
“It is true that India is going to perform in this crisis better than most other countries.But that is no consolation….Because we are a very poor country and if the crisis persists and if the lockdown is not lifted soon enough, it is quite possible that millions of people will be pushed into the margins of subsistence, he said when asked about his views on the present situation.
Subbarao said that as predicted by analysts, India will have a V shaped recovery which is far better than most of the other countries.
“And why can we anticipate a “V” formed restoration? Because not like in a cyclone or in an earthquake, this isn’t a pure catastrophe constraint.
No capital has been destroyed. Factories are standing. Ourshops are nonetheless standing. Our persons are able to work as quickly because the lockdown is lifted.
So it’s fairly potential the restoration shall be V formed and whereas we’ve got a V formed restoration, I feel India has a greater likelihood then many of the nations,” he opined.
According to him, India”s recovery was faster than many other countries after the 2008 global financial crisis. On IMFs prediction that India may grow at 1.9 per cent during the current year against about five per cent in the last fiscal, Subbarao said many analysts feel that the prediction is outdated and the growth in GDP may slip into negative.
He said the “life versus livelihood” dilemma for the country is arguably very “quick whereas” for India. Usha Thorat mentioned pumping extra liquidity into the system alone can’t work and banks and Non-Banking Finance Companies (NBFC) will want credit score assure or enhancement to start out lending.
She additionally mentioned that states want extra help through the disaster and streamlining of non-merit subsidies was required.
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