Reserve Bank of India (RBI) Governor Shaktikanta Das on Friday said that the GDP growth rate for the financial year 2020-21 is likely to be in the negative territory due to the severe impact of the coronavirus pandemic.
Briefing the media, Das said that the pandemic has severely impacted the global economy, including India's. He said that the pandemic has dealt a crushing blow to the demand.
"High frequency indicators points to collapse in demand in March," the Governor said.
Das, however, showed faith and confidence on the resilience of the Indian economy, and said: "We have faith on the Indian economy."
Off late, several banks and rating agencies have forecast a drastic fall in India's GDP growth rate.
Some pick-up in growth impulses is expected in second half of the year, according to Das.
Das also announced reduction in policy repo rate to 40 basis points to 4 per cent. He said that the central bank would maintain accommodative stance till growth revives.
The Governor also observed that investment demand has virtually come to a halt but added that agriculture and allied activities are a beacon of hope.
He also said that inflation outlook has become complicated due to incomplete data. The headline inflation will remain firm in the first half of H1 of FY21.