RBI article flags inflationary threat from Covid surge

MUMBAI: The second Covid wave, if left uncontrolled, could lead to prolonged restrictions on movement and supply-chain disruptions with consequent inflationary pressures, a Reserve Bank of India (RBI) article said on Monday. Written by a team led by deputy governor Michael Debabrata Patra, as part of the April bulletin, the article was accompanied by the usual disclaimer that the views expressed are those of the authors and do not necessarily reflect the views of the central bank. Inflation measured by the consumer price index (CPI) came in at 5.5% in March, faster than the 5% recorded in February owing to a sharp rise in food and fuel inflation. As part of its inflation-targeting mechanism, the government has retained the RBI’s flexible inflation target in the 2-6% band for the five years through 31 March 2026. “Pandemic protocols, spee-dier vaccination, ramping up hospital and ancillary capacity and remaining resolutely focused on a post-pandemic future of strong and sustainable growth with macroeconomic and financial stability is the way forward,” it said. The second wave has been more challenging than the first one last year. The lack of timely availability of medical-grade oxygen has accentuated the troubles.