Investment demand will be hit hard by delay in capex revival
With capacity utilization low even before the pandemic hit and with no resources for capex by central and state governments, it will take a long time for the capital goods sector to rebound
June 12, 2020 / 08:53 AM IST
The crippling effect of an extended lockdown on economic activity is turning out to be more acute than expected. In the recent RBI Monetary Policy Committee meeting of May 20-22, member Janak Raj pointed out that more than private consumption, investment demand will be hit hard in this uncertain environment. “It may be a huge drag on economic activity in the near future with attendant implications for potential growth,” he stated.
Janak Raj’s view finds an echo in the cautious management...