The country’s economy, which had shown resilience to come out from a downturn caused by the COVID-19 pandemic, was expected to bounce back from the next fiscal, State Bank of India Chairman Dinesh Kumar Khara said on Saturday.
There would be a ‘paradigm shift’ which would lead to a ‘more matured economy’, with economic players learning to contain costs, Mr. Khara added.
‘Permanent shifts’
Addressing the virtual annual general meeting of the Bengal Chamber of Commerce and Industry, Mr. Khara said, “The economy is expected to bounce back from the next fiscal starting from April 2021. The next normal will see a paradigm shift and some of them will be permanent.” Mr. Khara added that the economy had shown “resilience to come out from the downturn” and some positive traction has been witnessed towards the end of the first quarter of the current fiscal.
According to him, investment demand from the corporate sector would take some time to pick up.
“Average capacity utilisation among the corporations is around 69%. Investment demand from corporate will take some time to pick up.
“The cash-rich public sector units will initially embark upon their capital expenditure plan which will generate investment demand,” he said.
‘Careful with borrowing’
The corporate sector would become “very careful about borrowings” and use their internal resources initially.
He said the core sectors of the economy, such as steel and cement, had been doing well throughout the period starting from April, and that they were in a position to tap the export markets.
However, Mr. Khara pointed out, the travel, tourism and hospitality sectors were the worst-hit in the wake of the coronavirus outbreak.
