RBI Governor affirms global economy recovery from 'indelible & unparalleled' COVID impact

Reserve Bank of India (RBI) Governor Shaktikanta Das on Wednesday, September 22 said that the world is witnessing initial signs of recovery from the impact of the COVID-19 pandemic. According to the RBI Governor, the ongoing pandemic caused structural changes in the global economy and impacted the poor relatively more than others. While addressing an event he referred to the COVID-19 as a watershed event in this era. 

"It has caused widespread devastation of lives and livelihoods. There are very few parallels to this shock," the RBI Governor said. 

Shaktikanta Das was speaking at the 48th Convention of the All India Management Association (AIMA) on September 22 while the session was titled 'Beyond Recovery: New Rules of the Game'

COVID-19 pandemic 'likely to leave indelible marks on world economy': RBI Governor

Shaktikanta Das indicated that while the world is attempting to emerge from the present crisis (pandemic), it is also the right hour to pause and step back 'and plan for an economy which is stronger, more inclusive and sustainable'. Referring to the boost in productivity as technology gained potential during the shift to work from home arrangement, Das said, "As a result, consumption pattern is changing and companies are resetting their supply chains both globally as well as locally."

In India too, he said, COVID-19 impacted many dynamic sectors of the economy and propelled them to opt for greater adoption of new digital technologies. 

"The COVID pandemic has provided a new impetus to technology-driven companies such as fintech, edtech and health tech which are likely to see increased funding activity in the coming years," said Das. 

COVID's impact on India economy

Coming to COVID impact on economy of the country, Das said that the Indian financial system has transformed rapidly to support the needs of an economy, adding that global recovery has been uneven across countries and sectors. In India, a collaborative effort of stakeholders has been aiding the economy in accelerating the pace of COVID vaccination, Das said. He also said that the private sector is sustaining on vaccine manufacturing while the Centre is procuring and supplying the quota, further the state governments are delivering and administering record-breaking doses of vaccines across the country

According to the RBI governor, advanced economies have normalised faster on the back of a higher pace of vaccination and larger policy support while emerging and developing economies are lagging due to slow access to vaccines and binding constraints on policy support, he added.

Further, Mentioning the Production Linked Incentive (PLI) scheme is an important initiative to boost the manufacturing sector. 

"It is necessary that sectors and companies which benefit from the PLI utilise this opportunity to further improve efficiency," he added.

Conclusively, Das said, while the pandemic has created enormous challenges, it can also as an infection point to alter the course of development. Enhanced adoption of technology will give impetus to productivity, growth and income.