India is on its way to becoming the fastest-growing major economy in the world with necessary macro and micro growth drivers, a finance ministry report said.
According to the monthly economic review prepared by the ministry, faster vaccinations and teeming festivities will propel India’s ongoing recovery, resulting in less demand-supply mismatch and more job opportunities.
“Armed with the necessary macro and micro growth drivers, the stage is set to kickstart India’s investment cycle and catalyze its recovery towards becoming the fastest growing economy in the world,” the review said.
The survey said that growth will be supported by a supply-side push from reforms and easing of regulations, emphasis on infrastructural investment, boost to manufacturing sector through production-linked incentive (PLI) schemes, recovery in demand, rise in discretionary consumption after the rollout of vaccines and pick-up in the credit given adequate liquidity and low-interest rates.
IMF forecasts global growth rate to be 5.8%
IMF in its October 2021 update has improved global growth prospects to 5.8 per cent in 2021 and 4.9 per cent in 2022, triggering global trade growth by volumes of 9.7 per cent and 6.7 per cent, respectively.
The Economic Survey 2020-21, released in January this year, had projected India’s GDP growth of 11 per cent during the current financial year ending March 2022.
The WTO’s October forecast also confirms favourable trade prospects due to a resurgence in global economic activity and vaccine dissemination.
This augurs well for India’s export performance in the near future, lending credence to IMF projecting India to become the fastest growing economy among major countries in the current and next year.
Agriculture sector continues its strong presence
It added that the agriculture sector continues its strong presence in the economic recovery with higher acreage of Rabi sowing, improved reservoir levels and adequate availability of fertilizers and seeds as ensured by the government.
The sustained growth in agri-exports, a year-on-year growth of 22 per cent in April-August 2021, reflects the government’s commitment to raising farmers’ income, it said. Rural demand remains upbeat with month-on-month improvement in tractor and two and three-wheeler sales in September 2021.
Diwali sales stand at Rs 1.3 lakh crore
According to the Confederation of All India Traders, India’s economic recovery gathered steam in the festive season, recording decade-high Diwali sales of Rs 1.3 lakh crore.
The improvement in the COVID-19 situation amid the high business and consumer spirits gave a sustained economic recovery in October 2021 as well. However, The global economic recovery continues to be impacted by prolonged supply constraints and input cost inflation.
Retail inflation in control
Softening retail inflation and sufficient liquidity in the market are also displayed in largely stable G-Sec and corporate bond yields since July 2021, the report said.
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