The country's economic recovery will be based on rural demand

Mumbai, Ta. Saturday, October 24, 2020

The subsequent recovery of the Indian economy, which has been hit hard by the Corona, will depend on rural demand. Rising demand at the village level will help the economy recover, said Reserve Bank Governor Shaktikant Das at a meeting of the Reserve Bank's monetary policy review meeting. The minutes of the review meeting, which was held from October 4 to 5, were released yesterday.

Shaktikant Das expressed the view that rural demand would lead to the recovery of the country's economy. After a sharp decline in GDP in the first quarter of the current financial year, the second quarter is expected to improve, according to various indicators, and the overall improvement in the country's economy will be driven by rural demand, the governor said at the meeting.

Consumption demand is also rising in urban areas and sales of off-road vehicles have increased in August. The level of GST e-way bills has also come down to pre-epidemic levels. In addition, the September service and manufacturing PMI has also improved.

In its final meeting, the MPC maintained the repo rate at 5 per cent. India's real GDP is projected to decline by 2.50 per cent in the current financial year, according to the Reserve Bank's projection. The economic recovery will be seen in the March quarter of the current financial year.

Meanwhile, a special meeting of the Reserve Bank's board was held on Friday to discuss the economic situation and other challenges in the country in view of the uncertainty caused by the coronavirus epidemic, which discussed financial stability issues in detail.

The current economic situation of the country and the challenges posed globally were discussed by the board at the board meeting held through video conferencing, RBI sources said.