By Dr Sanjay Chaturvedi, LLB, PhD
On 17th April 2020, mid of lockdown, RBI Governor Shri Shanktikanta Das, made a comprehensive statement on estimation of GDP in next financial year. The Governor said in the statement that although the world is estimated to have recession as quoted by IMF, Indian GDP is expected to grow at 7.4% .
The Governor maintained “….the IMF projects sizable V-shaped recoveries: close to 9 percentage points for global GDP. India is expected to post a sharp turnaround and resume its pre-COVID pre-slowdown trajectory by growing at 7.4 per cent in 2021-22.”
He quoted IMF in his statement as “On April 14, the IMF released its global growth projections, revealing that in 2020, the global economy is expected to plunge into the worst recession since the Great Depression, far worse than the Global Financial Crisis. The IMF’s Economic Counsellor has named it the ‘Great Lockdown’, estimating the cumulative loss to global GDP over 2020 and 2021 at around 9 trillion US dollars – greater than the economies of Japan and Germany, combined.”
The Governor further stated “The World Trade Organisation sees global merchandise trade contracting by as much as 13-32 per cent in 2020. Global financial markets remain volatile, and emerging market economies are grappling with capital outflows and volatile exchange rates.”
Dr Niranjan Hiranandani – President – Assocham and NAREDCO in a statement to press said that “The positive GDP growth forecast by IMF for India at 7.4% post Covid crisis is silver lining amidst dark terrain. Today’s overarching financial instrumental steps announced by RBI assured the constant monitoring of the daunting Human- Economic crisis. Today’s targeted liquidity transfusion measures aimed to improve the yield curve and incentivize banks to deploy more funding to the industry seems to be a kick-start step towards financial resilience”