With just over a month and a half to go before the end of the COVID-19 fiscal year, the situation is expected to improve in 2021-22. India suffered a major setback in 2020-21 due to the global epidemic. At the same time, global financial research institutes indicate that the country will return to the path of economic growth in the next financial year.
In the second quarter of the current fiscal, India’s GDP slowed to 7.5 percent, with signs of economic recovery. Various agencies had forecast a 10 percent economic slowdown in the second quarter. The slowdown in the second quarter, which was lower than expected, and the increased demand during the festive season led to the assessment that the economy was on the path to recovery. This ascension is confirmed by the observations made by global agencies such as the S&P and the IMF about India. Last month, the IMF forecast that India would grow by 11.5 percent by 2021. A report by S&P Global Ratings, released yesterday, also indicates that India will have a better financial year next year.
The Indian economy is on track to recover by the next financial year, according to a report by S&P Global Ratings. S & P predicts that India’s GDP will grow by 10 percent in the next financial year. The S&P report concludes that improved agricultural production, a lower number of COVID-19 patients and increased government investment will help the economy achieve better growth. At the same time, S&P expects the Indian banking sector to improve sooner rather than later. Banks will need more time to improve credit growth and overcome the financial meltdown caused by bad debts.
Only if all the positive factors remain strong will the economy return to the path of growth rapidly. The monsoon last year was the one that helped improve agricultural production. At the same time, the policy of the Government of India will lead to a strike by farmers, who contributes significantly to the economic growth of the country. Without rectifying this anomaly, the government’s arbitrariness will not do any good to the economy.
The S&PU report says a number of things need to be done to improve the economy, including making vaccinations available to a majority of the people without delay. However, the speed of vaccination has slowed down. According to Union Health Minister Dr Harsh Vardhan, the vaccine will be available to 3 crore people immediately and the remaining 27 crore by July. But the experience so far is that vaccination is not being carried out as fast as expected. Adequate awareness programmes on the need for vaccination are also needed.
S&P observes that the budget for the next financial year will support the recovery of the economy. The budget proposes more government investment than expected. While this should help the economy thrive, it will only pay off if projects are implemented without delay.