Finance Minister Nirmala Sitharaman indicated that contraction in the economy due to COVID-19 may come down to near zero this fiscal amid the ongoing economic revival and next year India will be one of the fastest-growing economies.
“We can see the revival now particularly in the PMI (purchasing managers’ index) which shows a spurt in the number, the highest after 2012 which itself indicates that the revival is there, which is going to be steady and sustainable,” Sitharaman said at the 4th Annual India Energy Forum by CERA Week in response to a question on GDP growth expectations.
“If that sustainable revival is going to happen between Q3 and Q4, we expect overall GDP growth notwithstanding pandemic should be as predicted by IMF as negative or near zero this time. Next year clearly India will be seeing itself as one of the fastest-growing economies,” she added.
She said the recovery is being witnessed in all sectors after lifting of lockdown, which was enforced as part of measures to contain the pandemic, and added that recovery signals have been seen in the primary sector.
India’s economy contracted 23.9 per cent in the June quarter. The International Monetary Fund (IMF) this month projected the Indian economy to contract by 10.3 per cent in the current fiscal amidst the coronavirus pandemic. The RBI had said that the economy will contract 9.5 per cent in fiscal 2021.
The minister said the rural sector is doing well and auto sales have seen good growth.
“Festival season has commenced in India, as a result of which I expect the demand to go up and therefore be sustainable also. Foreign Direct Investment (FDI) inflow have seen 13 per cent growth in COVID-19 affected April-August 2020 compared to April-August 2019,” she said.
Speaking about the country’s energy requirements, Sitharaman said “efficient gasification will drive the Indian economy” and that the country is looking at effective usage of bio-fuels.
“India is ready to partner with private players for nuclear energy,” she added. Prime Minister Narendra Modi had made the inaugural address at the CERAWeek forum on Monday.