India economic growth 'extremely fragile', says RBI MPC member

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India's economic growth is now ‘extremely fragile' and needs all the support that it can get, as private consumption and capital investment are yet to pick up, RBI Monetary Policy Committee (MPC) member Jayanth R Varma said on Friday.

Varma added that out of the four engines of growth for the economy, exports and government spending supported the Indian economy through the pandemic, but other engines need to pick up the baton now.

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"I like to think in terms of the four engines of growth for the economy: exports, government spending, capital investment and private consumption...while exports cannot be the main driver of growth because of the global slowdown, government spending is necessarily limited by fiscal constraints."

Varma said that concerns about future growth prospects appear to be deterring capital investment. "The critical question is whether the fourth engine of private consumption will remain buoyant after the pent-up demand dissipates over the coming months. I, therefore, fear that economic growth is now extremely fragile and needs all the support that it can get," he said.

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