International Monetary Fund (IMF) had earlier this month had pegged India’s GDP growth to contract 10.3 per cent in FY21.
India’s strategy of dealing with the Covid crisis has paid off and the country’s economy is set to bounce back and emerge stronger, said President FICCI Dr Sangita Reddy. Highlighting the ‘initial green shoots of recovery’, Reddy added, “the PMI for Manufacturing and Services has recovered to 56.8 and 49.8 respectively in September 2020. There has been a pick-up in e-way bill volumes, improvement in revenue earning freight traffic of major commodities, positive growth in exports, and most significant increase in the September GST collections to almost pre-COVID-19 level.” The GST revenue in October, in fact, crossed the Rs 1 lakh crore mark for the first time since February to Rs 1,05,155 crore.
These incremental trends, said Reddy, are heartening and need to be sustained, and further initiatives like the consumption vouchers must continue to remain focused on demand generation. FICCI had earlier recommended consumption vouchers from the government in order to boost spending. Apart from this, Reddy had said in September said that FICCI has suggested the government to also look at urban MNREGA and cash backs to ramp up demand.
“Also significant are vibrancy of our entrepreneurs who are always able to spot an opportunity and move proactively, the capabilities and diligence of our working class, the commitment of our farmers and energy of our youthful population that seeks a better future, India is capable to bounce back and emerge stronger from this crisis,” Reddy added.
Importantly, International Monetary Fund (IMF) had earlier this month had pegged India’s GDP growth to contract 10.3 per cent in FY21 even as it is expected to bounce back with an 8.8 per cent growth rate in 2021. This would help India surpass China’s expected growth rate of 8.2 per cent to again become the fastest-growing emerging economy, according to the latest World Economic Outlook report. Industry body PHD Chamber had also recently estimated the GDP contraction by 7.9 per cent in FY21 and growth by 7.7 per cent in FY22.