Policy credibility

Monetary policy framework should not be undermined

The spread of Covid-19 and the ongoing lockdown have affected economic activity significantly, with many economists expecting the Indian economy to contract in the current fiscal year. These projections are likely to worsen as it is still not clear when normalcy would be restored. A taste of things to come was evident on Wednesday, when the US announced that its economy shrank at an annual rate of 4.8 per cent in the first quarter, the steepest contraction since the last recession. The worst is obviously yet to come, with many analysts terming the first-quarter numbers as the tip of the