Backed by the rapid pace of Covid vaccinations, the ministry of finance Wednesday provided a bullish outlook on the economy. Armed with the necessary macro and micro growth drivers, the stage is set for India’s investment cycle to start, he said, adding that this should catalyze its recovery to become the fastest growing large economy in the world.
In its October monthly economic review, the Department of Economic Affairs (DEA) under the ministry said further stimulus to demand, a more complete restoration of supply chains, a narrowing of supply and demand mismatches, and a tightening of supply and demand mismatches are on the way. increased job generation.
Gross fixed investment (GFCF) increased 55 percent in the first quarter (Q1 2021-22 (FY22) on a low basis from the 46.6 percent contraction a year ago, giving an overvalued figure. Pre-Covid Q1 2019-20, the GFCF was down 9.3% in Q1 Q2 22. The investment cycle, especially the private sector, has yet to be resumed.
However, the department has issued a cautionary note. Main retail said inflation – which is the rate of increase in the prices of non-food and non-petroleum products – remains stable at 5.9 percent in September. He attributed core inflation the tightening of input costs and the ripple effect of escalating global oil prices.
“However, these concerns have not rooted in self-fulfilling inflationary expectations as seen in the Reserve Bank of India’s (RBI’s). inflation survey, “the DEA noted.
According to the RBI survey, for the first time since January of this year, households were expecting a decline in inflation. After increasing for three successive rounds, median household inflation expectation fell by 50 basis points (bps) to 10.8 per cent for the next three months and from 60 bps to 10.9 per cent for year to come in September.
In its October review, the department expressed hope that the recent central excise cut on gasoline and diesel would ease the inflationary pressures exerted by rising crude oil prices.
The DEA cited data provided by the Confederation of All India Traders to say the economic recovery took effect during the festival season, posting ten-year Diwali sales at Rs 1.3 trillion.
The department attributed the economic recovery to Aatma Nirbhar Bharat Abhiyan which encompasses major structural reforms. He said he reported business opportunities and expanded spending channels.
Citing the World Trade Organization (WTO) October forecast on global trade prospects, the DEA said this bodes well for India’s export performance in the near future, giving credit to the International Monetary Fund ( IMF) which projects India to become the fastest growing economy among the major countries in the current and next year.
In its latest update of its flagship publication – World Economic Outlook – the IMF set India’s economic growth at 9.5 percent for the current fiscal year and 8.5 percent for next year.
On Monday, the WTO updated its forecast for the volume of global trade in goods to an increase of 10.8% in 2021, from the 8% increase expected in March of this year.
The department distributed statistics on main sector growth, industrial production index, demand, bank credit, bond yields, goods and services tax, exports, rabi planting, outbound shipments of agricultural products, rural demand as indicated by the tractor and from two-wheeled vehicle sales to corroborate his expectations that the economic recovery is underway.
The department said all states covered over 50% of their adult population with the first dose of the Covid vaccine. As many as 11 states and territories of the Union (UT) have vaccinated the entire adult population with at least one dose.
Although Kerala still has the largest number of active and new cases, it has inoculated the entire adult population with at least one dose. The state accounted for 47 percent of the total active cases.
More than 38% of adults in India have been fully vaccinated, he said, adding that Sikkim is leading the vaccination campaign and has fully vaccinated nearly its entire adult population.
Ladakh and Goa have fully vaccinated more than three quarters of their adult population. As many as 16 states and UT have fully vaccinated more than 50% of adults. The other states that have fully vaccinated about 25% of adults are Uttar Pradesh, Bihar, Jharkhand and Punjab.
Overall, 80% of active cases are found in Kerala, Maharashtra, Tamil Nadu (TN), Mizoram and Karnataka. As many as 20 states and UT represent only 1% of active cases.
A similar pattern can be seen in the average number of deaths in October, with Kerala accounting for 65% of total deaths in the country, followed by Maharashtra, TN and West Bengal. Mizoram has the maximum number of daily deaths, compared to 100,000 inhabitants. However, 25 states and UT accounted for less than 3% of deaths in the month.