The Reserve Bank of India (RBI) stated that India's economy has not moderated to the extent it was during the first wave, but uncertainties can act as a deterrent in short term. The RBI Annual Report released on Thursday states that the country's growth now depends on how fast the second wave of Covid-19 infections can be controlled. RBI also told that reform measures in various areas were likely to improve India's growth potential on a sustainable basis.

The conduct of monetary policy in 2021-22 will be guided by evolving macroeconomic conditions, it said.

The Central Bank stated that the fight against the pandemic as a collective global effort will bring better results than countries fighting on their own with the virus.

The RBI suggested that stretching the health infrastructure in terms of capacity could help handle the surge in the number of infections in the Covid-19 second wave.

The RBI report opines that it is important for the government to adhere to a clear exit strategy and build fiscal buffers, which can be tapped into in events of future shocks to growth.

The Bank said that the Goods and services tax (GST) collections notched up the highest level on record as it crossed the Rs 1 lakh crore mark for the seventh consecutive month in April. It suggested that manufacturing and services production has been maintained.

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