"Typically, post-crisis recoveries have been led more by consumption than investment; however, investment-led recoveries can be more sustainable and can also lift consumption in parts by better job creation," it added.
India on Thursday posted 211,298 new coronavirus cases over the past 24 hours, while deaths from Covid-19 rose by 3,847.
RBI said central and state government deficits could rise when revised estimates are released and high levels of deficit and debt could pose challenges in financing once private investment picks up.
RBI said its balance sheet increased by 6.99 per cent in FY21 to 57.08 trillion rupees ($785.7 billion), mainly reflecting its liquidity and foreign exchange operations. The bank's income decreased by 10.96 per cent but its expenditure also fell by 63.10 per cent, it said.
The central bank reported net gains of 506.29 billion rupees from its foreign exchange transactions in FY21 as against 29.993 billion rupees in FY20, a key contributor to the 73.5 per cent higher surplus transfer to the government last week apart from its higher interest income.
RBI's board approved a significantly higher than expected surplus transfer of 991.22 billion rupees to the government last Friday, but it may not be enough to cushion the damage from a crippling second wave of the novel coronavirus.
RBI added that reform measures in various areas were likely to improve India's growth potential on a sustainable basis.