Reserve Bank of India (RBI) released the Report on Currency and Finance (RCF) for the year 2021-22.

Key Highlights:

• According to the report, the Indian economy is likely to take over 12 years to overcome the COVID-19 losses.
• Taking the actual growth rate of (-) 6.6% for 2020-21, 8.9% for 2021-22, and assuming a growth rate of 7.2% for 2022-23, and 7.5% beyond that, India is expected to overcome COVID-19 losses in 2034-35.
• The supply constraints and longer delivery times pushed up shipping costs, and commodity prices, thereby intensifying inflationary pressures and threatening the nascent economic recovery across the world.
• While the RBI expects the Indian economy to grow at 6.35 in FY24, the International Monetary Fund’s (IMF’s) latest World Economic Outlook (WEO) report pegged India’s growth rate for FY24 at 6.9%.

Theme of the report

• The theme of the report is “Revive and Reconstruct” in the context of nurturing a durable recovery post-COVID and raising trend growth in the medium term.

Other Findings of the Report:

• The report states that for the country to hop on to a strong and sustainable growth path, price stability is a necessary precondition.
• Reducing general government debt to below 66% of GDP over the next five years is important to secure India’s medium-term growth prospects.
• The report emphasized providing opportunities for entrepreneurs and businesses.
• India’s free trade agreement (FTA) negotiations should focus on the transfer of technology and better trade terms for high-quality imports from partner countries.
• The report says that the task is to create a virtuous cycle of greater opportunity for entrepreneurs, businesses, and the fiscal authority.

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:
• Aggregate demand.
• Aggregate supply.
• Institutions, intermediaries and markets.
• Macroeconomic stability and policy coordination.
• Productivity and technological progress.
• Structural change.