New Delhi, Jan 29 (UNI) The Indian economy will rebound by 11 per cent in fiscal 2021-22 following a V-shaped recovery after a 7.7 per cent contraction in the current fiscal, said the Economic Survey 2020-21 tabled in Parliament on Friday.
The bounce back has been aided by continued normalisation of economic activities, COVID-19 vaccination and a host of policy measures taken by the government, the Survey presented by Finance Minister Nirmala Sitharaman said.
The survey said the rebound will be led by the low base and continued normalisation in economic activities as the rollout of COVID-19 vaccines gathers traction.
It said the fundamentals of the economy remain strong as gradual scaling back of lockdowns along with the astute support of Atmanirbhar Bharat Mission have placed the economy firmly on the path of revival.
This path would entail a growth in real GDP by 2.4 per cent over the absolute level of 2019-20 implying that the economy would take two years to reach and go past the pre-pandemic level.
These projections are in line with IMF estimate of real GDP growth of 11.5 per cent in 2021-22 for India and 6.8 per cent in 2022-23.
India is expected to emerge as the fastest growing economy in the next two years as per the IMF.
India’s real GDP to record a growth of 11 per cent in 2021-22 and nominal GDP by 15.4 per cent-the highest since independence.
The V-shaped economic recovery is supported by the initiation of a mega vaccination drive with hopes of a robust recovery in the services sector and prospects for robust growth in consumption and investment.
The Survey says, India’s GDP is estimated to contract by 7.7 per cent in FY2020-21, composed of a sharp 15.7 per cent decline in first half and a modest 0.1 per cent fall in the second half.
Sector-wise, agriculture has remained the silver lining while contact-based services, manufacturing, construction were hit hardest, and have been recovering steadily.
Government consumption and net exports have cushioned the growth from diving further down.
Last month. the RBI had said it expected the country’s GDP to contract 7.5 per cent in the year ending 31 March, 2021.
The Survey predicted a "V-shaped" recovery for the economy, spurred by the COVID-19 vaccination programme.
"Given the level of development India is in, India must continue to focus on growth so that it expands the pie which enables redistributive policies to lift people out of poverty," Chief Economic Advisee Krishnamurthy Subramanian said later at a news conference.
The survey also cautioned that it would take at least two years to revert to pre-pandemic gross domestic levels.
Indian economy contracted by a massive 23.9 per cent year-on-year in the April-June quarter. This was the first GDP contraction in more than 40 years. For the July-September quarter, India's GDP contracted 7.5 per cent year-on-year, as per estimates released by the National Statistical Office.
With the economy returning to normalcy, hopes of a robust recovery in services sector, consumption, and investment have been rekindled, said the survey.
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