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RBI's Annual Report for 2019-20
Why is it in news?
- The Reserve Bank of India (RBI) released its Annual Report for 2019-20.
- Following are the key findings of the report.
Shrink in growth:
- RBI foresees the economic contraction triggered by the COVID-19 pandemic extending into the second quarter.
- The shock to consumption has been severe.
- The government consumption would be key to the revival of demand.
- Urban consumption demand has suffered a bigger blow.
- Rural demand, by contrast, had fared better.
Wide-ranging reforms:
- RBI made a strong case for deep-seated and wide-ranging reforms to regain losses and return to the path of sustainable economic growth.
- Structural reforms in factor and product markets, the financial sector, legal architecture, and in international competitiveness would be needed.
Inflation:
- As per the report, headline inflation may remain elevated in Q2:2020-21 but may moderate during H2:2020- 21 aided by large favourable base effects.
- Retail inflation was at 6.93 per cent in July, above the upper tolerance limit of 6 per cent (4 per cent target plus 2 per cent).