On 5 May 2021, the Reserve Bank of India governor Shaktikanta Das announced a Rs.50,000 crore (US$ 6.77 billion) lending program to help ramp up the health infrastructure as India is facing a rampant second wave of the Covid-19 pandemic.
Das said that the Reserve Bank of India (RBI) would inject liquidity worth Rs.50,000 crore, which will be available for banks to lend to vaccine manufacturers, hospitals, other medical facilities, and coronavirus patients. The banks will have to maintain a ‘Covid loan book’ and get funds at the current repo rate of 4% for a term of three years. The program will run till 31 March 2022.
Reserve Bank of India on restructuring the terms of borrowings
The RBI has decided to offer individual borrowers and small businesses with loan exposure of up to Rs.25 crore another window to restructure the terms of their borrowings. This second chance will be available to those who did not take up the RBI’s loan restructuring offer announced last year in the first wave of the Covid-19 pandemic. However, borrowers who did take up the offer last year may extend the moratorium period for another two years.
Das downplayed the economic impact of the second wave of the pandemic in India. He said the disruption in the manufacturing sector had been ‘minimal’ and consumer demand unaffected. He did add that the global economic outlook was “highly uncertain and clouded with downside risks.” According to him, the weather department’s normal monsoon forecast would help sustain rural demand and likely to have a “soothing effect” on food prices.
The second wave of Covid-19 in India
The curve of the active Covid-19 cases in India started to accelerate upward on 9 February 2021 when the number of daily new cases reached a low of 8,947 across the country (www.worldometer.com). The curve accelerated upward from then in March and then more steeply in the first four days of April 2021.
On 5 May 2021, the country recorded 3,982 Covid-19 related deaths, which is the highest daily toll so far. The new Covid cases added on 5 May 2021 were 4,12,618. On 5 May, the new recoveries numbered 3,30,676 cases.
The fatalities officially attributed to Covid-19 in India since January 2020 are now at 230,151. With the addition of 4,12,618 infection cases in a single day, the total number of persons infected by Covid-19 in the past 16 months rose to 20,665,148. A total of 3,571,625 active patients of Covid-19 still await an outcome – with the recovery rate at 98.68% and the fatality rate now reaching 1.32%