MPC members see Covid-19 lockdown dealing a multi-year hit to economy

Demand impact will continue to weigh heavily on economic activity for some time, says Shaktikanta Das, but is optimistic about rural economy due to good farm harvest

The six-member monetary policy committee (MPC) of the Reserve Bank of India (RBI) was deeply concerned about the economic wreck that the Covid-19 pandemic has caused, which would take several years to repair.

  

RBI Governor Shaktikanta Das warned of a severe impact on the economy due to the two months of lockdown, a collapse in demand as gauged by the high frequency indicators, and fall in private consumption and investment, as can be seen through tepid bank credit growth. The hit in demand will continue to weigh heavily on economic activity for some time to come, governor Das said. But he