Demand, employment severely hit by 2nd wave of Covid: RBI

The RBI Bulletin for May 2021 noted that the real economy indicators moderated through April-May 2021.

"The biggest toll of the second wave is in terms of a demand shock - loss of mobility, discretionary spending and employment, besides inventory accumulation, while the aggregate supply is less impacted," it said.

It, however, said that the resurgence of Covid-19 has dented, but not debilitated economic activity in the first half of Q1 2021-22. Although extremely tentative at this stage, the central tendency of available diagnosis is that the loss of momentum is not as severe as at this time a year ago, it added.

On the NBFC segment, the report said that the consolidated balance sheet of NBFCs grew at a slower pace in Q2 and Q3 2020-21. However, NBFCs were able to continue credit intermediation, albeit at a lower rate, reflecting the resilience of the sector.

The Reserve Bank and the government undertook various liquidity augmenting measures to tackle Covid-19 disruptions, which facilitated favourable market conditions as indicated by the pick-up in debenture issuances.