What are your views on economy 2020 &2021?

RBI held rates (Repo-4%,Reverse repo-3.35%) unchanged which will lead to following impacts anticipated in near future:

• Inflation to continue grow at a higher rate projected sharply, from 5% in H2FY21 to 6.3%(6.8% in 3Q and 5.8% in Q4) especially in the supply side.
• Growth forecast raised as well from a contradiction of 9.5% in FY21 to a contraction of 7.5%
• Excess liquidity
• Boon for the bond market
• Real estate sector and service sector to grow largely in the coming years

I believe the RBI took right steps in doing so, although inflation has a lot disadvantages like (reduction in purchasing power, eroding savings and wages...) but due to this slowdown in economy in the past few months the only way left was cut in the rates in order to sustain growth and recovery in the pandemic.

Otherwise a lot of people would have lost hope and believe in the financial sector if this has not been done, a no. of credit defaults may have happened in this situation.

To reduce the basic food inflation government is already taking steps specially for the marginalised segment of our country by announcing big packages.

Policy priorities could change next year. With the coming of a vaccine rising recovery rate and herd immunity in some parts of the economy service sector to get a boost.

Major worries which are troubling is commodity price pressure that could be uncontrollable in the near future and demand is also likely to recover and the trade off between excess liquidity and monetary policy stance.

It would take at least 2 years to reach the original position but we must be thankful that government has been taking right steps till now and keeping away the economy from alarming adversities.

While lot of small mid size companies that were affected largely they will probably start to continue there operations in the standard way in coming 6 months.

With a lot many companies we interact with they take it as a 0 year and are hopeful that they will grow businesses in coming year after this gets over.

While I still remain optimistic in this situation and agree with the authorities that they see bigger picture beyond what I read, see and think but I would like my connections to comments on the situation they see forward!!!