Duvvuri Subbarao, former Governor of Reserve Bank of India (RBI) has warned that a prolonged lockdown may push millions into poverty. He said this while addressing a webinar on “History repeats – but differently- Lessons for the post Corona World,” organised by the Manthan Foundation.
“Because most analysts believe that this year India will actually have negative growth or growth will contract. We must remember that even ahead of the crisis two months ago our growth slowed. Now it has completely stopped. Last year growth was five per cent. Just imagine, five per cent growth last year and we are going to negative or zero growth this year, a decline of five per cent growth,” Duvvuri Subbarao said.
“It is true that India is going to perform in this crisis better than most other countries.But that is no consolation….Because we are a very poor country and if the crisis persists and if the lockdown is not lifted soon enough, it is quite possible that millions of people will be pushed into the margins of subsistence” he added.
“And why do we expect a “V” shaped recovery? Because unlike in a cyclone or in an earthquake, this is not a natural disaster constraint. No capital has been destroyed. Factories are standing. Ourshops are still standing. Our people are ready to work as soon as the lockdown is lifted.So it is quite possible the recovery will be V shaped and while we have a V shaped recovery, I think India has a better chance then most of the countries,” he opined.
According to him, India”s recovery was faster than many other countries after the 2008 global financial crisis. On IMFs prediction that India may grow at 1.9% during the current year against about 5% in the last fiscal, Subbarao said many analysts feel that the prediction is outdated and the growth in GDP may slip into negative.
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