Amid the second wave of the COVID-19 pandemic, India’s economy came to very feeble grounds. Despite the virus-induced blows to the economy, the Finance Ministry is optimistic about the V-shaped recovery, leading to the economy standing on firm grounds.
Based on several leading macroeconomic indicators, the Finance Ministry in its latest report hinted at hopes for the road ahead and said that the V-shaped recovery will be intact, despite the possible onset of the third wave of the pandemic.
The economic data from the April-June quarter showcased a year-on-year GDP growth of 20.1 per cent from the brutal contraction of 24.4 per cent in the same quarter in 2020. The fast-paced climb of the economy is being laid by the ministry on the grounds of growth in e-way bills, digital transactions, power consumption, and sturdy Goods and Service Tax (GST) collections. Moreover, the ministry’s confidence roots from the buoyancy in the domestic equity markets with Nifty 50 and Bombay Stock Exchange Sensex at records high in August.
“Sustained growth in the e-way bills generated since the second-wave peak points at robust revenue collection. In addition, the local restriction being lifted off also oiled the supply chain throughout the country,” the report said.
According to ET Times report, the merchandise exports crossed the $30 billion mark for the fifth time consecutively in the fiscal year 2021-22. Moreover, in July, the core industry index displayed a rise of 1.1 per cent from the numbers projected in July 2019, showing an all-around recovery in the industrial sector.
The revival estimates are also aided by the PMI soaring at an 18-month high of 56.7. In addition, the Consumer Price Index (CPI) inflation came to a three-month low showcasing rapid restoration in supply chains. Furthermore, vaccination coverage in India is expanding at an impressive rate, especially in rural areas, indicating a smooth path to a profitable fiscal year.
In the report, Finance Ministry also suggested that India still needs to hold its guards up against the evolving virus and focus on maintaining COVID-19 appropriate behaviour to curb the damage done in the subsequent wave. The month of June saw the fastest expansion of the economy, with the construction and manufacturing sector rebounding hard.
While the ministry is reiterating the V-shaped recovery, many experts believe that the growth of the Indian economy is W-shaped, based on the quarter-on-quarter growth rather than the government’s year-on-year spectacle.