India Cenbank Says Longer Policy Support Is Needed for Sustained Economic Recovery

India's central bank said on Monday that policy support is needed for longer for a sustained recovery in Asia's third largest economy from a coronavirus induced slowdown, even as demand has picked up, Reuters reported. Earlier this month, The Reserve Bank of India's (RBI) monetary policy committee kept interest rates steady at record lows and reiterated the need to unwind pandemic-era stimulus only gradually to aid the nascent economic recovery. "Premature tightening could bring about the stagflation that all fear, quashing growth just as the economy is recovering," the RBI said in its monthly bulletin. Perhaps the need of the hour is not to focus "so single-mindedly" on normalisation but on supply side reforms to ease the bottlenecks, labour shortages and high commodity prices, especially crude oil, the central bank added. India's economy rebounded in the April through June quarter even as a devastating second wave of COVID-19 swept the country, with growth of over 20% compared to a year earlier, driven by a surge in manufacturing and higher consumer spending. Read more.