Former RBI Governor Duvvuri Subbarao on Sunday said that a prolonged lockdown may push millions of Indians into the “margins of subsistence”, a ”V” curved recovery is expected as soon as the COVID-19 crisis, after that India will have a turn around in its economy faster than some economies.
Former Deputy Governor of RBI Usha Thorat took part.in a webinar on “History repeats – but differently-Lessons for the post-Corona World,” organized by the Manthan Foundation here, in which Former RBI Governor spoke.
He further said that most analysts believe that this year India will have negative growth or growth will contract and must remember that even ahead of the crisis two months ago our growth slowed but it has completely stopped. Last year growth was five percent but now it is declining to zero.
When asked about views on the present situation, he said that it is true that India is going to perform in this crisis better than most other countries, but that is no consolation as we are a very poor country and if the crisis stretches and the lockdown are not lifted soon enough then there might be a possibility that millions of people will be pushed into the margins of sustenance.
Subbarao said that India will have a recovery of V-shape as predicted by analysts, which will be far better than other countries.
And, a V-shaped recovery is expected because this is not a natural disaster, no capital has been destroyed and when all factories and shops will reopen upon upliftment of lockdown the will be a recovery, said Former Governor of RBI.
As per him when the 2008 financial crisis occurred globally India’s recovery was faster than many other countries.
He said that the confusion between life and livelihood for the country will be for a short time only. Usha Thorat also said that only adding more liquidity into the system will not work alone and banks and Non-Banking Finance Companies (NBFC) will need credit guarantee or enhancement to start lending.
She also said that states require more support amidst the crisis and streamlining of non-merit subsidies was required.