According to the Ministry of Finance, India’s economic recovery gained momentum in September, buoyed by the ebb of the second wave of COVID, rapid vaccinations and improved mobility, which currently stands at around 90% of pre-pandemic level.
India’s cumulative vaccination coverage against COVID-19 passed the 100 crore dose mark on Thursday, according to the Union Ministry of Health and Family Welfare.
Aditya Birla Group Chairman Kumar Mangalam Birla said India’s economy is recovering in very good condition.
Speaking to ANI, Birla said: “I think India is doing well. I think this quarter has been a very good quarter, almost every industry would attest to that and I think in the next few months we should back to pre-COVID levels. . So I think the economy is in very good shape.”
The agricultural sector continues to bolster rural demand with an estimated increase in Kharif production, record purchases of wheat and paddy during the Rabi marketing season and the current Kharif marketing season, respectively.
Amid easing regional mobility curbs and emerging growth impulses, industry is gaining lost ground, with the Industrial Production Index (IPI) recording broad-based annual growth of 11.5 % in July 2021, led by growth in capital goods and durable consumer goods.
The acceleration in the year-on-year growth of the index of the eight major industries in August to 11.5% to recover 104% of its corresponding pre-pandemic level suggests a further strengthening of industrial growth in the coming months.
Synergistically, the rise in the Manufacturing PMI to 53.7 on improving consumer demand and business confidence, coupled with the Services PMI at 55.2, establishes a robust recovery.
The latest trends in high-frequency economic indicators in August and September further point to a broad-based recovery evidenced by sustained improvement in energy consumption, rail freight activity, electronic transport bills, Robust GST, road toll collections posting a 21-month high, sequential increase in air cargo and passenger traffic, and a surge in digital transactions, according to a statement from the Ministry of Finance.
Meanwhile, auto registrations and sales remain impacted by a global shortage of semiconductor chips.
With supply chains restored, mobility improved and food inflation easing, consumer price index (CPI) inflation returned to a four-month low of 5 .3% in August 2021, clearly demonstrating that inflationary trends are pandemic-induced and transitory. However, price volatility in international crude oil markets and rising prices for edible oils and metal products may continue to be concerns.
Meanwhile, the International Monetary Fund earlier this month forecast India’s growth rate at 9.5% for 2021 and 8.5% for 2022.
Tata Steel Managing Director and Confederation of Indian Industry (CII) Chairman TV Narendran believes the country will resume the growth trajectory that was there in the pre-pandemic era.
“The 9.5% was our own GDP growth forecast. RBI forecast the same and now the IMF has come up with the same growth projection. More important is next year’s growth projection. What is good. 8.5% means that India will be one of the fastest-growing major economies. Before the pandemic, this growth was coming back very strongly. The pandemic has delayed this growth, but now I believe we will come back to the trajectory we were on before the pandemic,” Narendran told ANI.
He added that many sectors are already at a pre-pandemic level such as the metal sector. But aviation, hospitality, the travel industry or the automotive industry have not yet reached the pre-pandemic level. The automotive industry has a demand, but due to semiconductor problems, there is a supply problem.
India’s economy had shrunk by 7.3% in 2020 due to the impact of the COVID-19 pandemic.
Sanjiv Bajaj, Chairman and Managing Director of Bajaj Finserv, said, “The IMF projections are a very encouraging projection. The economy is back on track. Almost back to 80-90%. vague, but we have now improved the health infrastructure. The economy is opening up and the cities are opening up well. We have seen improvement quarter over quarter. This economy is capable of coming back very strong in the next calendar year.
The rapid recovery with growth impulses visibly transmitted to all sectors of the economy.
According to the Ministry of Finance, sustained and robust growth in agriculture, a sharp rebound in manufacturing and industry, the recovery in services activity and sustained incomes suggest that the economy is progressing well.