Slowdown takes a toll on the economy: RBI
The 2018-19 annual report of Reserve Bank of India has stated that Indian economy (both rural and urban areas) has been marred by a cyclical slowdown. “A decomposition of various seasonally adjusted indicators of economic activity, aggregate and sectoral, into trend and cyclical components suggests that the recent deceleration could be in the nature of a soft patch mutating into a cyclical downswing, rather than a deep structural slowdown,” stated RBI in a statement.
The report has also stated that issues related to “land, labour and marketing” will need to be addressed as a broad-based downturn has already begun in sectors such as manufacturing, trade, hotels, transport, communication and broadcasting, construction and agriculture. This follows RBI’s earlier monetary policy review this month, wherein the central bank cut its growth projection for FY20 to 6.9% from its June forecast of 7%.