The resumption of economic activity has indeed ushered in an improvement in the nation’s fiscal standing and despite the emergence of the second wave of COVID-19 the economy stands resilient with multiple sectors exhibiting improved recovery.
The beginning of the new year has seen the emergence of a renewed COVID-19 wave with new variants. Despite the slow rise in the number of cases across the globe, economic activity in India has gathered pace, due to heightened consumer sentiment owing to the smooth vaccination drive in the country.
The economy has been on a V-shaped recovery since July 2020, buoyed by several high-frequency indicators including Agricultural growth, trade growth, power consumption, FDI and FPI inflows among others. The arrival of the COVID-19 vaccines has been balanced by the spread of a new mutation of the virus across the nation and the world at large.
The end of the year saw the arrival of the much-awaited COVID-19 vaccine, which may further help in curbing the pandemic. India has been successful in bending the COVID-curve till date, with reducing weekly/daily infections, rising recovery rate (now at around 95 per cent) and one of world’s lowest case fatality rates. The effective management of Covid-19 spread despite the festive season and onset of winter season, combined with sustained improvement in high frequency indicators and V-shaped recovery along with easing of lockdown restrictions distinguish Indian economy as one riding against the COVID-wave.
A State-wise index of GI tagged products in India.
Lets take a look at India’s economic progress, as the third quarter of 2020 continues to exhibit signs of significant economic recovery, aided by targeted policy making in the three tranches of Atmanirbhar Bharat.
A steady contraction of active COVID-19 cases and a low fatality rate has definitely brought optimism amongst people. However this must not be taken lightly and caution must continuously be taken. Resurgence of economic activity is evident from the movement of high frequency indicators in October aiding in the recovery of the Indian economy.
The Government has put in place a policy framework on FDI, which is transparent, predictable and easily comprehensible. This framework is embodied in the Circular on Consolidated FDI Policy, which may be updated on an annual basis, to capture and keep pace with the regulatory changes, effected in the interregnum. The Department for Promotion of Industry and Internal Trade (DPIIT), Ministry of Commerce & Industry, Government of India makes policy pronouncements on FDI through Consolidated FDI
Policy Circular/Press Notes/Press Releases which are notified by the Department of Economic Affairs (DEA), Ministry of Finance, Government of India as amendments to the Foreign Exchange Management (Non-Debt Instruments) Rules, 2019 under the Foreign Exchange Management Act, 1999 (42 of 1999) (FEMA).
The economy has slowly been recovering and even the number of COVID-19 cases seem to have crossed their peak. Even though the pandemic is far from being over, the number of cases in mid-September, fell from an average of 93,000 to 83,000 while the number of tests increased from 1,15,000 to 1,24,000. With this silver lining in the cloud, India sets the stage to bolster yet again the frontiers of economic recovery. As our Hon’ble PM quoted “jaan bhi aur jahan bhi”, the industry and nation alike are making concentrated efforts to revive the Indian economy, focusing on MSMEs, as they employ more than 11 crore people.
The second quarter of the FY 21 in India, witnessed the gradual unlocking of the economy, acting as a catalyst to its recovery and rehabilitation. Micro indicators like auto sales tractor sale, steel consumption, GST collection, PMI, performance of core industries, amongst others, are enough proof of a V-shaped recovery in India.
With the gradual unlocking of the economy, we are well on the path to recovery and rehabilitation, ably supported by a plethora of Government policies. The Monthly Economic Report, July 2020 gives us insight to India’s economic revival.
The Government of India on July 29, introduced the National Education Policy 2020, a major feat that aims to drive large scale, transformational reforms in school and higher education. The policy has been designed to help India empower its rich human resource on the way to developing an inclusive and sustainable society and economy.
India is now gradually moving towards an economic revival led by a Rs.21 trillion (+US$280.4 billion) stimulus package aimed at delivering socioeconomic security amid the uncertainties of the global pandemic.
Global growth has hit unprecedented depths of despair amidst COVID-19 with substantial risks of even more severe outcomes remaining. The IMF’s World Economic Outlook of April 2020 projected global output in 2020 to contract by 3% with the output of advanced countries contracting more than emerging markets and developing economies.
Following a cyclical downturn, the Indian economy had begun to regain momentum with clear signs of an uptick in consumption and investment towards the end of Q3 2019-20, only to be halted by the pandemic that made the Government enforce country-wide lockdown in late March 2020.