Reserve Bank of India (RBI) Governor Shaktikanta Das said on Wednesday that India's economic recovery is likely to be gradual as the rising rate of coronavirus infections continues to pose a risk.
Addressing the FICCI National Executive Committee Meeting, Das observed that economic recovery is not fully entrenched and is expected to be an incremental process.
However, he reiterated that the RBI stands battle ready to take the required steps to ensure liquidity in the system and boost economic growth.
The central bank chief further expressed that the GDP (gross domestic product) data for the first quarter (Q1) of FY21 was a telling reflection of the "ravages of the COVID-19".
"The recovery is, however, not yet fully entrenched and more over in some sectors the optics which was noticed in June and July, they appear to have levelled off... by all indications, the recovery is likely to be gradual as efforts towards reopening of the economy are confronted with increasing infections," he said.
The Indian economy contracted 23.9 per cent in the first quarter of the current financial year.
As per government data, GDP during the April-June quarter contracted 23.9 per cent on account of strict lockdown imposed by the government towards the end of March to check the spread of coronavirus.
In his address, Das spoke about the initiatives taken by the central bank to ease the liquidity situation and make available funds to the businesses impacted by the pandemic and subsequent lockdowns.
The governor also assured the industry that "RBI is battle ready... whatever measures are required will be taken by the RBI" to help the industry and businesses to come out of the COVID-19-induced crisis.
Further, he asked businesses to capitalise on the new opportunities created by the pandemic at the global level.