“As India battles the ferocious rise of new infections, a strong policy response is building,” the central bank said.
India has been in the grip of a severe second wave of Covid-19 infections since mid-February. The country reported over 350,000 cases on Monday, for the second successive day with the daily death toll also hitting a record high.
Several states have imposed lockdowns to contain the spread of the virus, which has proved to be several times more infectious than the first wave last year.
Apart from contact-intensive sectors, activity indicators largely remained resilient in March and grew beyond pre-pandemic levels, the central bank said. The RBI in its monetary policy statement had highlighted that renewed restrictions could be detrimental to the economic recovery that was at the moment fragile.
The Monetary Policy Committee’s members had highlighted earlier that the second wave may delay the economy’s ability to reach pre-pandemic levels by a few quarters.
“The resurgence in Covid-19, if not contained in time, risks protracted restrictions and disruptions in supply chains with consequent inflationary pressures,” the RBI said.
