Niti Aayog Vice Chairman Rajiv Kumar predicted that India will register double-digit growth in the current financial year 2021-’22, PTI reported on Sunday. Kumar said that economic activities are expected to gain strength in the second half of the current fiscal as the country recovers from the Covid-19 pandemic.
Though several economic organisations, including the Reserve Bank of India, have revised their growth projections for India to under 10% in the past couple of months, Kumar expressed confidence that they will have to alter their predictions again.
On June 4, the Reserve Bank of India revised its estimates for 2021-’22 to 9.5% from the previous forecast of 10.5%. The central bank’s Governor Shaktikanta Das said the sudden rise in Covid-19 infections and fatalities in the second wave of the pandemic had “impaired the nascent economic recovery” that was underway.
Since then, at least two ratings agencies have made similar predictions. In the last week of June, S&P Global Ratings lowered India’s growth forecast for 2021-2022 to 9.5% from the earlier projected 11%. Moody’s Investors Service has also revised the growth forecast for India to 9.6% from the earlier estimate of 13.9%. The World Bank cut its growth projection to 8.3% from the estimated 10.1% in April.
India’s Gross Domestic Product contracted by an unprecedented 7.3% in the previous financial year, 2020-’21, hit by the pandemic and a nationwide lockdown that disrupted economic activities.
However, Kumar, exuded hope and suggested that the Centre was better prepared for a possible third wave of the coronavirus. “I feel the impact of the third wave on the economy will be much weaker than it was during the second wave and the beginning of the first wave,” he told PTI.
The Niti Aayog chief based his arguments on the fact that India’s equity markets have remained buoyant and the country has been able to attract record levels of foreign direct investment for 2020-’21 and between April and June in 2021-’22.
He further asserted that the prospects were better for the disinvestment and that the Centre would be able to achieve its Union Budget target of divesting assets worth Rs 1.75 lakh crore.
He claimed that private investments have already started to pick up in some sectors like steel, cement and real estate. As for consumer durables, he admitted that recovery might take longer as buyers are hesitant due to the pandemic.
“Full-fledged private investment recovery, we should expect by the third quarter [October-December] of this [fiscal] year,” Kumar said, according to PTI.