Union Finance Minister Nirmala Sitharaman on Friday said that India can see an economic recovery from next year backed by a coronavirus vaccine, reported the Hindustan Times. Her comments came after Prime Minister Narendra Modi, citing experts, told political parties that a vaccine against Covid-19 could be available for roll-out in the next few weeks.
“The vaccine coming brings in a certain positivity,” Sitharaman said at the 18th Hindustan Times Leadership Summit. “A vaccine efficiently delivered…will only bring in confidence among the people, both the workers, employers and also people who are engaged in some or the other economic activity.”
The finance minister said that the logistics and distribution networks will be important in the vaccination drive. She, however, did not reveal more details about the vaccination process.
“We don’t know what will be the details which come with the vaccine,” she said. “Will it be one dose or two doses? Will it be two doses with two or three weeks in between? Will two doses be sufficient? Unless we get all these details, I really cannot work towards a number.”
Sitharaman said that the current situation in the country after the coronavirus-induced slump is drastically different from February, when she presented the Budget. “But unfortunately, post the Budget in February 2020, not just India, globally you saw unexplainable challenges,” she said. “We did what I would call a judicious mixture of fiscal and monetary [measures].”
The finance minister also spoke about the recovery in the 2020-’21 second quarter. The economy had contracted by 7.5% in the quarter to September, registering an improvement from the 23.9% fall during the previous quarter.
Sitharaman said the signs of a pick-up was because of the expansion in the core sectors and not just due to pent-up demands and the festival season. “Recovery is consistently happening in the last two months…you hear core sector industries, cement, iron and steel, integrated plants are all going in for expansion, not just in one unit but across the country, you’re hearing of expansion,” she said.
She also said that the revenue from the Goods and Services Tax going beyond Rs 1 lakh crore for the second consecutive month in November was a clear indication that economic activity was going back to normal. She maintained that the GST was one of the best things for India’s federal system, despite the government struggling to meet the revenue shortfall.
“It is a robust system…there could be some discussion,” Sitharaman said. “But to be fair, everyone has spoken from the point of view of concerns freely being expressed and finding a solution.”
The finance minister also defended the Centre’s relief measures, saying that 30 crore people received cash transfers during the coronavirus lockdown. She, however, acknowledged that the fiscal deficit will certainly be higher than the 3.5% of GDP target set in the 2020 Union Budget.