By: Shubham Ghosh
THE Indian economy will register a double-digit growth in the current fiscal while the disinvestment climate looks better, Indian government think tank Niti Aayog vice chairman Rajiv Kumar has said in a recent interview to PTI.
Conveying that India’s story has remained “very strong”, Kumar said the country is much better prepared if there is a Covid wave since the states also have learnt lessons from the previous two waves.
“We are now hopefully getting past our (COVID-19) pandemic… and the economic activities will be strengthened as we get into the second half of this (fiscal) year given what I have seen for example various indicators, including the mobility indicators,” Kumar, an economist, said.
In many quarters, concerns have been raised over the progress of the Indian economy, particularly after the devastating second wave which wreaked havoc. The recovery rate of the economy which has been adversely hit by the pandemic has been relatively sluggish in the wake of the second wave.
Kumar, however, exuded confidence that the recovery will be “very strong” and those agencies and organisations that have revised their GDP estimates downwards for the fiscal may have to revise them upwards again.
“Because, I expect India’s GDP growth this (fiscal) year would be in double digits,” he said.
The country’s economy contracted by 7.3 per cent in the fiscal that ended March 31 this year.
Rating agencies like S&P Global Ratings have cut India’s growth forecasts for the current fiscal to less than 10 per cent from 11 per cent earlier while Fitch Ratings has reduced the projection from 12.8 per cent estimated earlier to 10 per cent. The downward revisions are mainly because of slowing recovery rate post the second wave.
The Reserve Bank of India has pegged the economic growth at 9.5 per cent in the fiscal that ends on March 31, 2022, indicating the possibility of a robust rebound.
When Kumar was asked about a timeline around when private investments will pick up, he said significant investment in capacity expansion is already happening in some sectors like steel, cement and real estate.
He conceded that it might take longer in the consumer durable sector since consumers might feel a little hesitant because of the pandemic-induced uncertainty.
“Full-fledged private investment recovery, we should expect by the third quarter of this (fiscal) year,” the Niti Aayog official said.
‘Government much better prepared for third wave’
On the possible third wave, Kumar said the government is much better prepared in facing the situation if at all there is a third wave.
“I think the government is far better prepared now to face the third COVID wave, if at all it does come up… I feel the impact of the third wave on the economy will be much weaker than it was during the second wave and the beginning of the first wave,” he said.
On the possibility of the government achieving its ambitious disinvestment target this fiscal, Kumar said despite the second wave and its big impact on the health side, markets have remained buoyant and touched new heights.
“I think this sentiment not only will continue but it will strengthen as we go forward… India story remains very strong especially with respect to the FDI which has now created a new record both for 2020-21 and between April to June in 2021-22,” Kumar said, adding the climate for disinvestment is looking better and he is very hopeful that the disinvestment target will be fully realised.
