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A protracted blockade could possibly push millions of Indians to “subsistence margins,” former RBI Governor Duvvuri Subba Rao said Sunday as he waited for a recovery in V once the Covid-19 crisis and change ends. in India it is faster than some economies. .
I was participating in a webinar on repeating History, but in a different way, Lessons for the Post-Crown World, “hosted by the Manthan Foundation here, in which former RBI Lieutenant Governor Usha Thorat participated” Because most analysts they believe that this year India will really have negative growth or growth will contract. We must remember that even before the crisis two months ago, our growth slowed. Now it has come to a complete stop.
Last year growth was five percent. Imagine, a growth of five percent last year and we are going to have negative or zero growth this year, a decrease in growth of five percent, “he said.
“It is true that India will perform better in this crisis than most other countries.
But that is not a consolation …
Because we are a very poor country and if the crisis persists and if the blockade is not lifted soon enough, it is very possible that millions of people will be pushed to the margins of subsistence, he said when asked about his views on the actual situation. .
Subbarao said that, as analysts predicted, India will have a V-shaped recovery that is much better than most other countries.
“And why do we expect a V-shaped recovery? Because unlike a cyclone or earthquake, this is not a restriction on natural disasters.
No capital has been destroyed. The factories are standing. Our stores still stand. Our people are ready to work as soon as the blockade is lifted.
Therefore, it is very possible that the recovery is V-shaped and, although we have a V-shaped recovery, I think India has a better chance than most countries, ”he said.
According to him, India’s recovery was faster than that of many other countries after the 2008 global financial crisis.
Based on the IMF prediction that India could grow 1.9 percent in the current year against approximately five percent in the last fiscal year, Subbarao said many analysts believe the forecast is outdated and that GDP growth may fall negative.
He said that the “life versus livelihood” dilemma for the country is possibly very “short” for India.
Usha Thorat said pumping more liquidity into the system alone cannot work and that banks and non-bank financial companies (NBFCs) will need credit guarantees or improvements to start lending.
He also said states need more support during the crisis and that rationalization of meritless subsidies is required.
