The Reserve Bank of India (RBI) said that policy support is required to maintain India’s recovery. Earlier this month, The Reserve Bank of India’s (RBI) monetary policy committee kept interest rates the same as before.

“Early tightening can bring the recession that all fear, withdrawing growth just as the economy is recovering,” the RBI said in its monthly bulletin. Maybe right now, we need to focus on normalisation but on supply-side changes to relieve the restrictions, labour shortages and high commodity rates, particularly Crude oil, the central bank added in the statement.

India’s economy recovered in the April through June quarter even after a destructive second wave of Covid-19 in the country, with a growth of more than 20 per cent compared to last year, struck by an increase in manufacturing and higher consumer spending. The central bank said that the global semiconductor shortages raised commodity rates and input costs, and possible global financial market immovability is a disadvantageous risk to local growth possibilities, it added.