Chief Economic Advisor KV Subrahmanyam said, “Given the uncertainty surrounding the epidemic, it would be very difficult to give any real numbers but our assessment is that there will not be a huge impact.”
chief economic advisor
Chief Economic Adviser KV Subrahmanyam said that the second wave of COVID-19 is not expected to have a major impact on the Indian economy, but the financial and monetary policy to accelerate the pace of growth further. Help will be needed. He also said that given the circumstances arising out of the epidemic, it is difficult to predict whether the country’s economic growth rate will be in double digits (more than 10 or 10 percent) in the current financial year.
The Economic Survey 2020-21, released in January this year, had projected a growth of 11 per cent in the current financial year ending in March 2022.
Second wave will not have a big impact
Subramaniam said, “Given the uncertainty surrounding the pandemic, it will be very difficult to give an actual number but our assessment is that there will not be a huge impact, especially taking into account that the estimates that we had made in both the Economic Survey and the Budget.” There were very modest estimates.
GDP declined by 7.3 percent
Let us tell you that the decline in India’s gross domestic product (GDP) was limited to 7.3 per cent in the financial year ended March 2021, after the growth rate in the last quarter just before the second wave of epidemic hit. Earlier there were estimates of a bigger drop than this. In the Economic Survey, the GDP for the financial year 2020-21 was estimated to decrease by 8 percent.
Subramaniam said the second wave of COVID-19 peaked in May and there is little risk of growth slowing in the first quarter of the current financial year due to local and state-wise restrictions imposed to contain the spread of the disease. He said that financial and monetary support will be important for the economy going forward. He said that financial and monetary support will be important for the economy going forward.
Good condition of economy improves by March 2021
The Chief Economic Advisor said that by March 2021, the condition of the economy had improved well. Frequently available data suggests that the pace of this recovery was affected by the second wave of the pandemic.
He said, there was a solid improvement in the GDP growth rate in the second half of the last financial year on the back of higher expenditure of the government and spurt in gross exports.
The rate and level of the second wave is expected to affect the economy
Subramaniam said the pace and scale of the second wave is expected to impact the economy as the economy was still recovering from the impact on supply and demand last year. Emphasizing the need to speed up vaccination and follow COVID appropriate practices, he said that this will help reduce the possibility of another wave of COVID-19.
Subramaniam said about inflation that it is expected to remain in the estimated range and it should not go above the prescribed limits. He also said that with the expectation of normal monsoon, record production of food grains is expected in this financial year.
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