Indian economy not as hard hit as first wave but uncertainties remain, says RBIIndia's economy has not moderated to the extent it did during the first wave but uncertainties can act as a deterrent in the short term, the Reserve Bank of India said on Thursday.

In its annual report, the central bank said the country's growth prospects now essentially depend on how fast India can arrest the second wave of COVID-19 infections.

"The recovery of the economy from the COVID-19 will critically depend on the robust revival of private demand that may be led by the consumption in the short-run but will require acceleration of investment to sustain the recovery," the central bank said in its annual report.

It also added that reform measures in various areas were likely to improve India's growth potential on a sustainable basis.