The Reserve Bank of India (RBI) Economic Activity Index suggested that the economy rebounded sharply from May-June 2020. It further suggested that there will be a short-lived contraction in the gross domestic product (GDP) and projected growth at -8.6 percent in Q2FY21. The report also suggested that Q3FY21 is going to be a growth quarter. Upasna Bhardwaj, Senior Economist at Kotak Mahindra Bank, shared her views and outlook in an interview with CNBC-TV18.

Share Market Live

NSE

Bhardwaj remains little sceptical on the positive growth outlook for Q3 but is confident that Q4 momentum looks positive.

“We have been a lot of positive news on the auto sector and how the traction has been over the last one-two months. However, lately the inventory levels with the dealers have been a challenge despite the festive season. We need to be watchful about the momentum that we have seen. Is it just pent-up or is it because it is coinciding with the festive season demand or will it sustain beyond that?” she wondered.

“Scope for rate cuts has not been there,” added Bhardwaj.

Speaking about the production-linked incentives (PLI) scheme, she mentioned, “If the ECLG (Emergency Credit Line Guarantee Scheme) is expanded to many sectors, it is going to be very positive from a near-term perspective. PLI little more medium-term as it goes beyond a year. Yes, the benefits will be seen because now it has been expanded.”

For more, watch video...

(Edited by : Niral Sharma)

First Published:Nov 12, 2020 1:31 PM IST