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The country’s economy, which has proven to be resilient after a recession caused by the Covid-19 pandemic, is expected to recover from the next fiscal year, State Bank of India President Dinesh Kumar Khara said Saturday.
There will be a “paradigm shift” leading to a more mature economy “with economic actors learning to contain costs, he said.
Addressing the annual virtual general meeting of the Bengal Chamber of Commerce and Industry, Khara said: “The economy is expected to recover in the next fiscal year starting in April 2021. The next normal will see a paradigm shift and some of it will be permanent. . “
Khara said the economy showed “resilience to get out of the recession” and there was some positive traction towards the end of the current fiscal first quarter.
According to him, the demand for investment from companies will take some time to recover.
“The average capacity utilization between companies is around 69%. Investment demand from companies will take some time to recover. Cash-rich PSUs will initially embark on a capital spending plan which will generate investment demand, “he said.
The business sector will become “very loan-conscious” and will initially use its own internal resources.
He said key sectors of the economy, such as steel and cement, are doing well throughout the period starting in April 2020 and are able to tap into export markets.
However, travel, tourism and hospitality are the sectors most affected after the coronavirus outbreak.
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