Will take a decade to overcome Covid losses

The Indian economy is likely to take over 12 years to overcome the losses inflicted by COVID-19, according to a report released by the Reserve Bank of India on Friday.

The report has projected that India lost more than a whopping Rs 50 lakh crore in output in the last three years.

“The output losses for individual years worked out to Rs 19.1 lakh crore, Rs 17.1 lakh crore and Rs 16.4 lakh crore for 2020- 21, 2021-22 and 2022-23, respectively.”

India is expected to overcome these losses in 203435, the report states.

In its report on currency and finance for the year 2021-22, the

RBI research team also states that the pandemic is not over yet, especially in view of the recent surge in China and South Korea and parts of Europe.

The report further says that price stability is a necessary precondition for strong and sustainable post-Covid growth. But only a series of structural reforms can nurture a durable recovery. "Timely rebalancing of monetary and fiscal policies will be the first step in this journey," the report says.

The structural reforms suggested by the report include enhancing access to litigation free low-cost land; raising the quality of labour through public expenditure on education and health and the Skill India Mission; and scaling up R&D activities with an emphasis on innovation and technology.

It has also made a case for creating an enabling environment for start-ups and unicorns; rationalisation of subsidies that promote inefficiencies; and encouraging urban agglomerations by improving the housing and physical infrastructure.

The report adds that the pandemic is a watershed moment and the ongoing structural changes catalysed by the pandemic can potentially alter the growth trajectory in the medium-term.