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India to take a decade to overcome COVID-19 pandemic losses

India’s PM Modi speaks to vaccine manufacturers last year.

Mumbai, India | Xinhua | India will take over a decade, or around 15 years, to overcome the losses incurred during the COVID-19 pandemic despite its economic growth rebounding from a low-base, the country’s central bank said in a report on Friday.

The monetary losses estimated by the Reserve Bank of India (RBI) stood at 250 billion U.S. dollars, 223 billion U.S. dollars and 214 billion U.S. dollars for 2020-21 (April-March), 2021-22 and 2022-23 fiscal year, according to the currency and finance report, which does not reflect the views of the central bank itself but of the contributors, who are part of the RBI’s Department of Economic and Policy Research.

“Taking the actual growth rate of -6.6 percent for 2020-21, 8.9 percent for 2021-22 and assuming growth rate of 7.2 percent for 2022-23, and 7.5 percent beyond that, India is expected to overcome COVID-19 losses in 2034-35,” the report said.

Price stability is a necessary pre-condition for strong and sustainable growth, the report said while proposing a 7-point blueprint for economic reforms.

The blueprint revolves around seven wheels of economic progress – aggregate demand; aggregate supply; institutions, intermediaries and markets; macroeconomic stability and policy coordination; productivity and technological progress; structural change; and sustainability.

Other recommendations include timely rebalancing of monetary and fiscal policies as a first step in this journey followed by reducing general government debt to below 66 percent of GDP over the next five years.

Structural reforms suggested in the report include enhancing access to litigation free low-cost land; raising the quality of labor through public expenditure on education and health, and encouraging urban agglomerations by improving the housing and physical infrastructure. ■

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