According to the Finance Ministry report, the country may have seen a spike in COVID-19 cases. The caseload data for the 14-day period from September 17 to 30 suggests that the infection may keep increasing. As a warning sign, the present scenario has prompted all stakeholders to drive for economic recovery as the positivity rate improves. As per the report during this time period, the seven-day average motion of daily positive cases had declined from about 93,000 to 83,000 whereas the daily average testing in these seven days increased from about 1,15,000 to 1,24,000.
“The declining positivity rate at all-India level sets the stage to further push up the frontiers of economic recovery. To speed up the economic activity, all stakeholders need to get into the act as slowly the restrictions on access and mobility are further eased. More than “social distancing” it is “self-protection with due precautions” that better fits into the context of “jaan bhi aur jahaan bhi”,” the monthly report of the finance ministry for September said.
In accordance with the economic data in September, the country has seen a steady recovery in almost all sectors also asserting that as India unlocks every day, there can be a noticeable revival across all economic segments.
“Economic indicators allude to a steady recovery in almost all sectors, with some sectors shooting above their previous-year levels as well. This is despite headwinds of increasing COVID cases in non-metro cities and rural areas and rising food prices. Positive results from the implementation of the Atma Nirbhar Bharat package and unlocking of the economy are evident in India’s high-frequency real sector indicators of September,” according to the finance ministry’s monthly economic review for September.
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The Indian economy has suffered from the lockdown imposed due to COVID-19. In the month of June, the GDP fell by nearly 24% due to a reduction in business activity. But as India underwent unlocking, and allowed economic and other activities to happen it has led to an improvement in a majority of economic indicators with most displaying a narrowing of sharp contractions in comparisons to the previous months.
With the implementation of Atma Nirbhar Bharat package and unlocking of the economy, the report stated that the economic recovery in India has gained momentum. This is visible in the agriculture sector with the production of Kharif foodgrains in 2020-21 estimated to go past the previous year’s level.
The growth of demand in the rural sector was reflected in the registration of two-wheelers/three-wheelers/passenger vehicles along with tractor sales surpassing previous year levels in August. Increase in global demand has expanded India’s export at 5.3% in September on a yearly basis while the recovery in rail freight enabled positive revenue earnings and it has seen growth for the first time since March in the months of August and early September, the report said.
With the relief in inter-state movement restrictions, quarantine policy and unlocking the country has seen a recovery in rail passenger earnings. Cargo traffic volumes continued to rise up towards previous year levels reporting a still lower year-on-year contraction in August. As the festive season is around the clock, there can be a boost in domestic aviation traffic also giving it growth.
According to the report prepared by the economic division in the department of economic affairs, “The sustained spread of the virus poses a downside risk to the short-term and medium-term growth rate. To combat these risks, the government has strategically undertaken various important structural reforms encompassing various sectors. These will strengthen the fundamentals of the economy towards a strong and sustainable long-term growth.”
“The enabling policy environment and initiatives taken by all stakeholders to seize the available opportunities will actualise the growth potential of the Indian economy. In its latest review, S&P Global Ratings have remained India’s investment-grade credit rating with a stable outlook as it expects the country’s economy and fiscal position to stabilise and begin to recover from 2021 onwards. India’s probable growth path is visible in this assessment,” said the report.