Sonal Varma is chief economist (India and Asia ex-Japan) and India economist, respectively, for Nomura
The spectre of lockdowns is looming large once more, and while there are bright spots, there are also risks and uncertainties to watch out for.
Policy normalisation is often feared, but it is, in fact, a good sign that the economy is returning to normal after the pandemic-inflicted shock. The hope is that this is not the old slow normal, but a new, and brighter, normal.
While we may estimate a sequential improvement in GDP growth in the second quarter, there is likely to be another massive contraction of (-) 10.4 per cent. Growth is likely to remain in negative territory for the next two quarters.
Easing the lockdown before controlling the pandemic is now stalling activity significantly below normal as the post-lockdown euphoria is ebbing
Discourse on RBI’s capital shows it is becoming sensitive to growth concerns.