NEW DELHI: Overall economic activity remained resilient amid the third wave, stated Finance Ministry in its Monthly Economic Review (MER) report for January 22 released on Wednesday.
MER report says the impact of the third wave on economic activity has been much weaker than the previous two waves. High-frequency indicators show that India's economy is well on its way to growing at above 9 per cent as projected in the country's advance estimates for the current year.
With the Monetary Policy Committee of RBI retaining its inflation forecast for 2021-22 at 5.3 per cent, the inflation for the current year is set to close within its tolerance band of 4 per cent plus-minus 2 per cent.
The real GDP growth estimated for 2021-22 at 9.2 per cent is likely to be realised and provide the economy the full recovery of real GDP level of 2019-20. The current year may as well end with an economic reset manifest of a post-Covid world.
Agriculture that continues to see a constant increase in net sown area and crop diversification will strengthen food buffers while benefiting farmers through generous volumes of procurement at remunerative minimum support prices and income transfers through PM Kisan.
The report also shows the government's commitment to additional security of MGNREGS for the rural workforce will always be in a ready state of deployment as was the case in the last two years. Manufacturing and Construction will be the "growth drivers", triggered by the Production Linked Incentive (PLI) schemes and public Capex in infrastructure.
According to the report, the Budget 2022-23 has strengthened the direction set for India's economy by the previous year's budget. The Capex budget, higher by 35.4 per cent over the current year's budget estimates, and rising to 4.1 per cent of GDP after inclusion of grants-in-aid to states for capital works, will power the seven engines of Gatishakti to reduce the infrastructure gap and facilitate private investment in the country.
Rising consumption levels consequent to employment generation by the government's capex will also induce private investment. PLI schemes in the 14 sectors will further incentivize private investment to achieve a higher export growth and enable viable import substitution in the country.