He said that aggregate demand conditions, particularly in contact-intensive services, are likely to see a temporary dip, depending on how the Covid situation unfolds.

With restrictions and containment measures being localised and targeted, businesses and households are learning to adapt, Das said, adding that, "consequently, the dent to aggregate demand is expected to be moderate in comparison to a year ago".

Citing reports, he said that disruption in manufacturing units so far is "minimal".

Consumption demand is holding up, with sales of consumer goods rising in double digits in January-March 2021, and average daily electricity generation up by 40.0 per cent year-on year in April. Rail freight has registered growth of over 76 per cent year on-year in April.

However, toll collections in April suggest that mobility has declined but quite unlike the abrupt halt in mobility during April last year.

Further noting that registration of automobiles in April 2021 has shown moderation compared to March and the Purchasing Managers' Index (PMI) for manufacturing continued in expansion mode in April, he said, "Overall, the high frequency indicators are emitting mixed signals."

He said that the central bank will closely and continuously monitor all incoming data to assess on a real time basis the impact of the second wave on macro-economic and financial conditions.

The Governor was of the view that aggregate supply conditions are underpinned by the resilience of the agricultural sector. The record foodgrains production and buffer stocks in 2020-21 provide food security and support to other sectors of the economy in the form of rural demand, employment and agricultural inputs and supplies, including for exports, he said.

The forecast of a normal monsoon by the India Meteorological Department (IMD) is expected to sustain rural demand and overall output in 2021-22, while also having a soothing impact on inflation pressures, Das added.

On the global economic recovery, he said that global economy is exhibiting incipient signs of recovery as countries renew their tryst with growth, supported by monetary and fiscal stimulus. Still, activity remains uneven across countries and sectors.

He noted that the outlook is highly uncertain and clouded with downside risks.