New Delhi: Even if the economy is going through a rough patch because of the coronavirus pandemic and subsequent lockdown, it will bounce back from next fiscal as there will be a paradigm shift in the new normal, asserted SBI chairman Dinesh Kumar Khara on Saturday. Also Read - Indian Economy Exhibited Stronger Than Expected Pick up in Momentum of Recovery: RBI
“There will be a paradigm shift which will lead to a more matured economy with economic players learning to contain costs,” he said. Also Read - Bank Strike Today: Banking Services Partially Affected as Lakhs of Employees Protest, SBI & Private Banks Functional
While addressing the virtual annual general meeting of Bengal Chamber of Commerce and Industry, 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.” Also Read - Bank Strike: Many Public Sector Banks to Remain Closed Across India on November 26, Here's Why
Deliberating further, he said that the economy had shown resilience to come out from the downturn and some positive traction was witnessed towards the end of the first quarter of the current fiscal.
As per his assessment, the investment demand from corporate will take some time to pick up.
“Average capacity utilisation among the corporations is around 69 per cent. Investment demand from corporate will take some time to pick up. The cash-rich PSUs will initially embark upon capital expenditure plan which will generate investment demand,” he said.
He also asserted that the corporate sector will become “very careful about borrowings” and use their internal resources initially.
He said the core sectors of the economy, such as steel and cement, have been doing well throughout the period starting from April 2020, and they are in a position to tap the export markets.
However, the travel, tourism and hospitality are the worst-hit sectors in the wake of the coronavirus outbreak.
(With inputs from PTI)