V-shaped economic recovery, vaccine approval cause for optimism: Finance Ministry

Downside risks, however, remain due to the spread of a new variant from the UK  and fatigue from social distancing guidelines, the Ministry noted.
Union Finance Minister Nirmala Sitharaman (Photo| Shekhar Yadav, EPS)
Union Finance Minister Nirmala Sitharaman (Photo| Shekhar Yadav, EPS)

NEW DELHI:  India’s successful management of the spread of Covid-19 combined with the “sustained improvement in high frequency indicators and V-shaped recovery” as well as the approval of the long-awaited Covid-19 vaccine, “gives strength to optimism on both health and economic fronts,” said the finance ministry on Tuesday in its Monthly Economic Review for December.

These factors “distinguish Indian economy as one riding against the Covid-wave,” the report claimed.

Downside risks, however, remain due to the spread of a new variant from the UK and fatigue from social distancing guidelines, the Ministry noted.

The report said that a sustained spurt in commercial and industrial activity was corroborated by continued growth in manufacturing, power demand, improvement in E-way bills generated and highway toll collection rising above pre-COVID levels. GST collections also touched record highs in December.

The ministry also picked out the agricultural sector as one which “remains the bright spot of Indian economy”, with a growth of 2.9 per cent in winter sowing, accelerating tractor sales, and increase in reservoirs storage at 122 per cent over the decade’s average.

However, other analysts point out that the country’s unemployment rate remains high—at 9.3 per cent according to CMIE estimates.

The lack of jobs seemed to be corroborated by the finance ministry report which said that demand for jobs under the MGNREGS has surged 56.8 per cent in December.

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