India’s robust V-shaped recovery from the aftermath of the brutal second wave of the COVID-19 pandemic is reflected through the provisional GDP estimates for the April-June (Q1) quarter of FY 2021-22. This is also evidenced by the sharp growth in the agriculture, manufacturing & construction sectors, the gradual revival of the services sector after the relaxation of lockdown restrictions, and the sharp rise in the country’s
services PMI (Purchasing Managers Index) at an 18-month high of 56.7. Vaccination coverage is expanding at a rapid pace , with around 60 percent of India’s adult population being vaccinated with at least first dose, as on September 8, 2021. The current recovery of the economy is broad based and fast, in terms of both supply and demand, indicative of the country’s strong macroeconomic fundamentals.
In spite of the vaccination drive going on smoothly and rapidly, the global resurgence of the highly transmissible Delta variant of COVID-19 between May to July has raised major concerns and placed emphasis on the importance of following social distancing and COVID appropriate behavior, despite a decline in the number of cases. India’s cumulative vaccine doses administered so far amount to 515 million, with 49.8 percent of the population having received the first dose and 14.2 being fully vaccinated. Aided by the receding second wave, this has paved the way for India’s economic recovery.
The Indian economy is on the path of recovery from the impact of the second wave of Covid-19, with targeted fiscal relief, monetary policy measures and accelerated vaccinations across the country. A fall in the daily COVID cases has been observed since the latter half of May 2021, along with the doubling of the daily vaccination rate from 1.93 million to 4.13 million in June, at the end of which around 78 percent of districts reached a COVID positivity rate below 5 percent.
The effect of the second wave of Covid-19, has been so gargantuan, that the momentum of economic recovery in India has been moderated. the effect of the second wave has been asynchronous and wider in its spread across states and has also entered the rural hinterland. Vaccinating to achieve herd immunity (75-80 per cent of the population) is key to boosting
consumer and reinvigorate economic growth.
In the month of April, due to the second wave of the pandemic, there has been a moderation in the economic recovery witnessed since the first wave of the pandemic. The agriculture sector continued its growth trajectory with record food grain production and tractor sales exhibited an increase of 172 percent.
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.