Finance Ministry Report Reveals Swift Recovery of Indian Economy

The Finance Ministry’s monthly economic review revealed that the government’s strategic reforms and the rapid vaccination drive led to the swift recovery of the Indian economy from the negative impact of COVID-19. 

The review also revealed that the sustained growth in agriculture, manufacturing activities, services sector and improved revenue collections indicate that the economy is progressing well.

The report revealed that India is well-placed on the path to swift recovery with the help of growth in all sectors. Strategic reforms implemented so far and new milestones in the vaccination drive enabled the economy to recover from the COVID-19 pandemic. 

India’s merchandise exports crossed the USD 30-billion mark for the sixth consecutive month in the financial year 2021-22. This situation indicates that the external sector continues to offer bright prospects to India’s growth revival.

There is clear evidence that consumption and investment demand is also picking up in India. The external debt-to-GDP ratio remains comfortable, declining to 20.2% at the end-June 2021 compared to 21.1% at the end of March 2021.

Also, the growth rate of bank credit stood at 6.7% YoY in the fortnight ending 10th September 2021 compared to 5.3% in the same period of the previous year.

The Consumer Price Index (CPI) inflation has reached a four month-low of 5.3% in August 2021 due to restoration of supply chains, removal of restrictions on mobility, and diminishing food inflation. It demonstrates that the inflationary tendencies are succeeding the pandemic impact.

However, unstable prices in the international crude oil markets and increased costs of edible oils and metal products may continue to pose concerns.

The high-frequency economic indicators in August 2021 and September 2021 further indicate a swift recovery. The report stated a significant improvement in power consumption, rail freight activity, e-way bills, GST collections, highway toll collections, air freight, passenger traffic, digital transactions, etc.

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For any clarifications/feedback on the topic, please contact the writer at dvsr.anjaneyulu@cleartax.in

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