IGI Logo

The finance ministry has said that the Indian economy is likely to do better than the projection of an 8 per cent shrinkage in the current fiscal as economic activity gathers pace with mild stiffening of pandemic curve and the rollout of vaccines. The Department of Economic Affairs in its monthly report said the recovery of global output has slowed following the re-imposition of lockdowns in advanced countries amid renewed COVID-19 waves and its emerging variants. However, economic activity in India has gathered pace with mild stiffening of the COVID-19 curve, failing to deter a steady uptick in consumer sentiment, which has been bolstered by the inoculation drive.

The report further said often overlooked in the spate of COVID-19 vaccine development and ongoing inoculation drive, social distancing poses as a social vaccine that also needs to be continuously administered for health and economy to make a quick recovery in India as well as abroad. The social vaccine is as important as the real vaccine. It also said positive GDP growth in Q3 of FY21 – for the first time since the onset of the pandemic – adds to the positive sentiment as the economy is set to close the year with activity levels higher than measured in the second advance estimates of GDP.

It further said the Reserve Bank's industrial outlook survey (IOS) conducted in Q3 of FY21 has also re-affirmed this optimism, with respondents indicating a strengthening of production, order books and employment during the third quarter, driven by easing of lockdowns, re-opening of businesses and improvement in the availability of finance from banks and internal sources.