Nodding yes! to the forecasts and warnings of rating agencies RBI Governor Shaktikanta Das, today agreed that the Indian GDP has slipped to an all-time low in 40 years and it will remain below zero during the year 2020-2021.
Shaktikanta Das in his address opened that the situation is wholly dependent upon how the Covid pandemic turns out. If the situation favors Das hoped a possible pick-up in growth impulses in second half of the year.
Just before the address, in a surprise move RBI slashed its repo rate 40 bps to make it 4 %, as a last-ditch effort to support the falling GDP. Many international rate analyzers were pretty sure of the great fall of the Indian economy before weeks. According to Goldman Sachs, the economy is heading for a 45% contraction in GDP in the quarter through June. It said Modi’s Rs 20 lakh crore package won’t have any immediate impact and predicted -5% growth for the full fiscal year.
CMIE, in April alone, an estimated 122 million Indians lost their jobs. Most of them were daily wagers. Within days of the last lot of the 5 stimulus packages delivered by the finance minister Nirmala Sithraman rating agencies and brokerages easily connected the dots and hidden tails and exposed the negative territory, the Indian economy is now venturing into.
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