India, assisted by strong micro and macro drivers, is on its way to becoming the fastest-growing economy in the world.
According to the economic review report prepared by the finance ministry, the vaccination drive and overwhelming festive season will push India’s progressive recovery resulting in tapering the demand-supply discrepancies and creating employment opportunities.
Aatmanirbhar Bharat Package helps in shaping the economy’s recovery and bringing structural reforms. Business opportunities and expansion of spending channels arm the recovery.
The Economic survey of 2021-22 projected GDP growth of 11% in the current fiscal year. The investment cycle act as a catalyst to strengthen the economic recovery.
Infrastructural investments, easing of regulations, boost to manufacturing sector through PLI (Production Linked Incentive) Scheme, pent-up demand, ramping up of vaccination drive, rise in discretionary consumption, credit growth, low-interest rates are the main factors supporting the recovery.
As per the Confederation of All India Traders, the Diwali sales recorded a decade high of 1.3 lakh crore, which accelerated economic recovery.
With high consumer and business spirits, India witnessed a speedy recovery in October 2021 as well. On the other hand, the global economy remains adversely impacted by supply constraints and input cost inflation.
IMF projected India to be the fastest-growing economy among various countries because of its promising export performance. It predicts improved global growth at 5.8% in 2021 and 4.9% in 2022. It foresees a trade growth, by volume, at 9.7% in 2021 and 6.7% in 2022.
WTO (World Trade Organization) also predicts favourable trade prospects due to the revival of global economic activity and vaccine distribution.
The agricultural sector is the main contributor to the economic recovery with higher production of rabi, improved reservoir levels, assurance from the government for adequate availability of seeds and fertilizers.
Agri-exports is rising, grew 22% on a YOY basis in April-August 2021. It indicates that the government is working towards its commitment to increasing farmers’ income. The rural demand improves month-on-month with an increase in sales of tractors and two and three-wheeler vehicles.
The G-Sec and corporate bond yields have stabilized with softening inflation and adequate liquidity in the market.
There is a deliberate effort on reducing the cost of borrowing, which was noticed in the RBI’s bi-monthly monetary policy meeting, keeping the repo rates unchanged and maintaining its accommodative stance while prioritizing growth.
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