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Finance Minister Nirmala Sitharaman has said that the fiscal measures taken by government during 2020-21 have been calibrated to sustain high spending in the economy and assist in its V-shaped recovery, resulting in a positive GDP growth of 0.4 percent in third quarter of FY 2020-21. The economy is estimated to contract by 8 per cent during 2020-21 due to the impact of the COVID-19 pandemic.

The minister further said that the gradual unlocking of the economy has eased supply-side disruptions enabling inflation to decline from 7.6 percent in October, 2020 to 4.1 percent in January 2021, mainly on account of decline in food inflation. She said lower inflation has increased the real purchasing power of the people leaving more money in their hands to spend. She noted that the money to spend has further increased under PMGKY and ANB packages through direct benefit and in-kind (food; cooking gas) transfers, emergency credit to small businesses and wage increases for MGNREGA workers, among others.

With regard to lockdown, Sitharaman said the government imposed a strict 21-days nationwide lockdown from March 25, 2020, to contain the spread of COVID-19 and ramp up the health infrastructure with a view to saving lives. She stated that astute management of the lockdown and subsequent unlocking along with strengthened health infrastructure was accompanied by roll out of Pradhan Mantri Garib Kalyan Yojana (PMGKY) and Atmanirbhar Bharat (ANB) packages that besides saving lives also protected livelihoods and businesses. She added that these measures, amounting to Rs 29.87 lakh crore - equivalent to 15 percent of India's GDP, have boosted consumer confidence as their implementation advanced through 2020-21.