Finance Minister Nirmala Sitharaman on Tuesday said that there were visible signs of revival in the economy and predicted the growth rate for this fiscal year (2020-’21) to be in the “negative zone or near zero”, reported PTI.
Speaking at the India Energy Forum of CERAWeek, Sitharaman said that despite a contraction of 23.9% in the growth rate in the first quarter (April-June), the country may manage to stay at zero growth level, if revival is sustained in the third and fourth quarter. She referred to the spurt in September in the purchasing managers’ index for the services sector as a sign of recovery in the economy. She said a “very firm lockdown” was imposed during the pandemic as the government put lives before livelihood. But with the restrictions being eased, macroeconomic indicators have shown signs of a revival.
She further said that the festive season will give a boost to demand and that the government is expecting an inflow of funds through the foreign direct investment route.
The finance minister’s prediction on the growth rate is, however, in sharp contrast to what prominent financial institutions have said about the state of India’s economy.
Earlier this month, the International Monetary Fund predicted that the Indian economy would contract by 10.3% in 2020-’21. The World Bank too said that the country’s gross domestic product is likely to contract by 9.6% in the current financial year.
The United Nations said in a report last month that the Indian economy would diminish by 5.9% this year. The Asian Development Bank predicted a negative GDP growth rate of 9%. American credit rating agency Fitch Ratings forecast a decline of 10.5%.