Economic activity in the country is holding up in the face of a renewed onslaught by the Covid-19 virus, the Reserve Bank of India said in its bulletin today.

The crushing second wave of COVID-19 has not battered the Indian economy, with a paper by Reserve Bank of India (RBI) staff saying that activity is holding up admirably. "It is noteworthy that economic activity in India is holding up admirably against COVID-19's renewed onslaught," the now-monthly 'State of the Economy' paper said.

"Apart from contact-intensive sectors, activity indicators largely remained resilient in March and grew beyond pre-pandemic levels on the back of strong momentum rather than statistical base effects," the paper added. The paper, which counts Deputy Governor Michael Patra as one of its authors, does not necessarily represent the views of the central bank.

Earlier this month, the RBI retained its GDP growth forecast of 10.5% for 2021-22 (Apr-Mar). The second wave of the pandemic, which began in mid-February, has pushed the health infrastructure of the country to the brink of collapse, with hospitals in the capital facing a daily battle to supply medical-grade oxygen to patients.

 As per the latest available data, India had reported over a million cases in the last 72 hours. The RBI staff paper recognises it is seen as optimistic. "One view is that we are too optimistic. Yes, confronted with a once-in-a-lifetime pandemic with no known cure so far, with infections and deaths that have drawn comparison to the Spanish flu of 1918, we have dared to keep the faith and dream about a COVID-vanquished world," the paper said.

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