NEW DELHI: The economy is recovering at a faster pace and is likely to reach pre-Covid levels by the end of this financial year, says the latest Finance Ministry report. However, it cautioned that the second wave of pandemic may derail recovery as a breach of social distancing is being observed.
“India stands poised to recover at a fast pace and reach pre-COVID levels by the end of the year, barring the incidence of a second wave that may be triggered by the fatigue with social distancing,” The finance ministry’s Department of Economic Affairs (DEA) said in its Monthly Economic Review for October. The report cited broader economic indicators to support their assumption.
“Movement of high frequency indicators in October clearly point towards broad based resurgence of economic activity, notably in healthy Kharif output, power consumption, rail freight, auto sales, vehicle registrations, highway toll collections, e-way bills, rebound in GST collections and record digital transactions,” the report highlighted. With the onset of the festive season, overall consumption is also expected to see a further uptick in the coming months, enhancing prospects of faster
economic normalisation.
DEA secretary Tarun Bajaj had on Tuesday said that India’s economy is moving faster than what most
economists had anticipated.“We are expecting further improvement in November. The economy is moving much faster than anticipated by economists. This is mentioned in the IMF report which says India’s growth should be 8.8 per cent in the next financial year, which is highest for major economies,” Bajaj had said, adding there hasbeen a lot of query from foreign investors.
Prime Minister Narendra Modi is also scheduled to address 20 top global fund managers in a video conference on Thursday, with an eye on attracting global investment in the infrastructure segment.The concerns remained on India’s current account balance, which recorded a surplus of $19.8 billion in the April- June 2020 quarter at 3.9 per cent of GDP.