Today (4th June, 2021) amid COVID-19 uncertainty and fears over inflation, RBI kept the benchmark interest rate unchanged.  Repo rate (lending rate) will continue at 4.00% and reverse repo rate (RBI’s borrowing rate) at 3.35%.

According to RBI Governor, growth projection for FY22 was scaled down to 9.5% in view of plan inflict by Covid’s second wave.  It was observed that India’s Forex Reserves may have exceeded $600 billion.  According to Commerce Secretary, the merchandise data in May, 2021 showed a significant growth of 69.39% over May, 2020 level and 7.93% over May 2019 level.

Due to second wave of pandemic (Covid-19) in the country during first quarter of the financial year 2021-22, most of the states declared partial/complete lockdown and therefore the economic activity was adversely affected, thereby registering a negative growth in most sectors except pharmaceutical and online e-commerce business sectors.

Over three-fourths of small businesses in the country have shown an adverse impact on their health during the COVID-19 pandemic, with those in the manufacturing sector reporting more troubles.  The survey, conducted by data firm Dun & Bradstreet has shown 82 per cent of businesses have experienced a negative impact during the pandemic year.

Over the past year, India has emerged to be one of the worst-affected nations globally by the COVID-19 pandemic. The resultant lockdowns, which are springing up again across the country with rise in cases, have an impact on the economic front as demand disappears along with dip in income generation.

The rate of recovery of India’s commercial enterprises, and thereby the economy, will be determined by the strength of the recovery of small business.