REPORT ON CURRENCY AND FINANCE (RCF) BY RBI

According to recent Reserve Bank of India’s (RBI) Report on Currency and Finance (RCF), the Indian economy may take more than a decade to overcome the losses caused by the outbreak of Covid-19 pandemic.
The theme of the report is “Revive and Reconstruct” in the context of nurturing a durable recovery post-Covid-19 nd rising trend growth in the medium-term.

Concerns Highlighted by the Report

The Covid-19 pandemic will go down in history as one of the worst health crises the world has ever faced.
The pre-Covid trend growth rate works out to 6.6% and excluding the slowdown years it works out to 7.1%.
Taking actual growth rate of (-) 6.6% for 2020-21, 8.9% for 2021-22 and assuming growth rate of 7.2% for 2022-23 and 7.5% beyond that, India is expected to overcome Covid-19 losses in 2034-35.
Its economic impact may linger for many more years and confront Indian Economy with the challenges of rebuilding livelihoods, safeguarding businesses and reviving the economy.
India suffered among the biggest pandemic induced losses in the world in terms of output, lives and livelihoods, which may take years to recover.
The Russia-Ukraine conflict has also dampened the momentum of recovery, with its impact transmitting through record high commodity prices, weaker global growth outlook and tighter global financial conditions.
Concerns surrounding deglobalisation impacting future trade, capital flows and supply chains have amplified uncertainties for the business environment.

Reforms Highlighted in the Report

Seven Wheels of Economic Progress: The blueprint of reforms proposed in the Report revolves around seven wheels of economic progress: