Chief Economic Officer KV Subramanian on Monday said the impact of the second Covid-19 wave may not be huge for the economy but going forward, financial and financial support will be needed to boost growth.
However, he said it would be difficult to predict whether double fundraising could be achieved due to the uncertainty surrounding the disease.
The 2020-21 Economic Survey released in January this year showed an increase of GDP by 11 percent in the financial year ending March 2022.
He said that because of the uncertainty about this epidemic it would be very difficult to give real numbers but the assessment that the impact will not be too great especially we remember that the estimates we have made in the Economic Survey and Budget estimates is very good.
It should be noted that the Indian economy has experienced a modest 7.3 percent increase in the fiscal year ending March 2021 following a sharp growth rate in the fourth quarter, just before the outbreak of a major global epidemic.
GDP printing was better than the expected 8 percent agreement for 2020-21 as specified by the Economic Survey.
Recognizing that the second wave of Covid-19 reached in May, Subramanian said the restrictions put in place and the government’s wisdom adopted to assess the spread of the virus put it at risk of growth in the first half of current funding.
He said that it seems at the moment that India (infection) is on the rise in May 8 … I must say that the epidemic-related caveat should be borne in mind that some of the measures we have taken may have serious uncertainties over the course of the epidemic over the course of the year. it cannot even be predicted by pathologists.
He said that they have assessed the state-funded stringency fund for April 2021 and beyond they are looking at 17 to account for more than 90 percent of GDP and to address the impact of the vaccine and the need to reimburse … they also have made that assumption … they think the economic impact the overall effect of the second wave will not be too great.
It is noteworthy that the government is considering whether there could be another round of economic stimulation. In the MSME sector, the government announced some support on Sunday, while the Reserve Bank on the financial side recently announced other measures including restructuring of loans up to cr 25 crore.
Recalling that the economy was recovering well in March 2021, he said, “the momentum of that recovery has been affected by the second wave as we have seen using the many frequency indicators we are aware of”.
He said that the GDP growth was achieved gradually in the second half of the final budget after government spending, as well as foreign exchange reserves.
The Subramanian stressed that the speed and frequency of the second wave is a warning to the economic impact as the economy has been recovering from last year’s recession and wants to be shocked.
He said that there is an urgent need to curb the spread of the epidemic – vaccination and adherence to Covid-compliant behaviors cannot be overemphasized.
With regard to rising fuel prices, he said “we expect inflation to be calculated in the foreseeable future”.
The CEA further stated that the production of food grains is expected to be at the highest level possible within the range of the hurricane.
To control inflation, the government in 2016 gave the RBI the authority to keep inflation at 4 percent with a 2 percent limit for the five-year period ending March 31, 2021.
Commenting on the 2020-21 GDP figures released earlier in the day, he said the 7.3 percent contract showed improvement over the 8 percent reduction agreement according to the second Advance Estimates rate in February 2021.
Gross domestic product (GDP) in Asia’s third-largest economy grew by 1.6 percent in January-March, rising from 0.5 percent in the last quarter as India began to release the recession caused by the epidemic over the past six months.
GDP grew by 3 percent in the January-March quarter of last year.
He said that In Q4, private expenditure increased by 2.7 per cent YoY, government spending by 28.4 per cent, total capital expenditure by 10.8 per cent, exports by 8.7 per cent and imports by 12.3%.
This means continued renewal of demand in the second half of the year, he said, adding that agriculture was the silver medal of the year with 3.6 percent growth in 2020-21.