Here's your 10-point cheatsheet to this big story:
The economy was estimated to contract by 8.6 per cent in the quarter ending September, resulting in a "technical recession" which occurs with two consecutive quarters of negative growth, the RBI said in its report.
The International Monetary Fund said last month that India's economy would contract by 10.3 per cent for the year.
Finance Minister Nirmala Sitharaman said today the economy was now recovering strongly, pointing to global ratings agency Moody's revision of India's calendar year contraction to minus 8.9 per cent from its previous minus 9.6 per cent estimate. "(It is) indicative of corrections happening in a positive direction," she told reporters in Delhi.
The RBI also added in that the "contraction is ebbing with gradual normalisation in activities and expected to be short-lived". The official gross domestic product figures for July-September will be published on November 27.
Even before Prime Minister Narendra Modi announced a strict lockdown in late March, India's economy was already sluggish - weighed down by record unemployment and a flurry of bad loans that made banks reluctant to lend.
Ms Sitharaman announced some Rs 1.9 lakh crore in fresh measures to support the manufacturing sector and create jobs. They include incentives to produce goods and services locally, as well as benefits for foreign firms that invest in Indian firms.
They come on top of the Rs 19.6 lakh crore package announced by Prime Minister Narendra Modi in May to revive the stuttering economy. The RBI economists, however, warned that households were still facing financial stress. "Stress intensifying among households and corporations that has been delayed but not mitigated, and could spill over into the financial sector," RBI wrote in the report.
"The recession is historically unprecedented because of its magnitude of the fall, so we are looking at a full-year decline of minus 5 to minus 10 per cent," Mumbai-based economist Ashutosh Datar told news agency AFP. "Another aspect that is crucial is the economy is much bigger now and India has global linkages, which was not the case previously before the (economic) liberalisation of 1991," he said.
The Atmanirbhar Bharat 3.0 stimulus measures announced today include additional funding for real estate developers and contractors, subsidies on fertilisers, incentives on employment generation and additional spending on rural jobs.
The latest package comes at a time when many economists have called for more stimulus measures to revive the economy, which is headed for its worst annual contraction in more than four decades, saying more needs to be done to create jobs and push demand.
With inputs from AFP