Niranjan Hiranandani, President, Assocham and NAREDCO, said: "There has been a total collapse in demand in both urban and rural India since March 2020. The government revenues have been impacted severely due to slowdown in economic activity", said the governor.
Painting a slightly optimistic picture, Das said the GDP growth might pick pace in the second half due to a combination of "fiscal, monetary, and administrative measures".
SBI Research had recently said that with the government extending the nationwide lockdown up to May 31, the RBI may extend the moratorium on repayment of loans for three more months.
Providing a great relief to borrowers, Das said the moratorium for re-payment of loans, which was earlier imposed for three months, has been extended for another three months till August 31. An extended moratorium will imply that companies need not repay loans until August 31, 2020, it stated. This has also been extended by another three months.
He said six states, that contributed the most to production, are in the red. Among other regulatory measures, RBI has hiked the group exposure limit for banks to 30 percent from 25 percent.
India's gross domestic product (GDP) growth will be in negative territory in 2020-21 as the outbreak of coronavirus has disrupted economic activities. Assuming economic activity gets restored in a phased manner especially in the second half of this year, and taking into consideration favorable base effects, it is expected that the combination of fiscal, monetary and administrative measures being now undertaken both by the government and the RBI could create conditions for a gradual revival in activity in the second half of 2021.
Taking a stock of the economic scenario, the RBI governor said GDP growth in 20-21 is estimated to remain in the negative territory with some pickup in the second half of 2021.
The RBI governor has announced a series of measures to ease liquidity pressure in the banking system and cushion the blow of Covid-19.
"These decisions are in consonance with the objective of achieving the medium-term target for consumer price index (CPI) inflation of 4 per cent within a band of +/- 2 per cent, while supporting growth", Das also said.
He added that the inflation outlook is also highly uncertain, but the central bank expects headline inflation to remain firm in the first half of 2020. Inflation may fall below 4 per cent in the third or fourth quarter of the current fiscal, according to the Governor.