India’s economic recovery bucks global trend: FinMin

On the move:Rising rural income is mirrored in passenger vehicle sales and a rebound in vehicle registrations.reuters  

While the global economic recovery has been hit by second waves of infections and more stringent lockdowns in several countries, India’s economy is ‘riding against the COVID-19 wave’ with persistent improvements in economic indicators showing a V-shaped recovery, the Finance Ministry said on Tuesday.

“The new year has dawned with the approval of long-awaited COVID-19 vaccine and initiation of vaccination drives in various countries. This gives strength to the optimism on both health and economic fronts despite continuing surge in global cases and the potential challenge of a mutant strain,” the Department of Economic Affairs said in its monthly economy review for December.

“In the global economy, rise in lockdown stringency following second waves has slowed... recovery, as seen in tapering Purchasing Managers’ Index estimates, decline in port traffic activity, and stagnating commercial flight activity…,” the review noted, contrasting that trend with India’s recovery path.

‘Sustained improvement’

“The effective management of the COVID-19 spread despite the festive season and onset of winter season, combined with sustained improvement in high-frequency indicators and V-shaped recovery, along with easing of lockdown restrictions distinguish Indian economy as one riding against the COVID-wave,” it said.

Stressing that the agriculture sector — which clocked 3.4% growth in the first two quarters of FY21 — remained the bright spot of the Indian economy, the review pointed to a 2.9% rise in rabi sowing this year, along with accelerating tractor sales suggesting rural distress had been successfully addressed by the PM Garib Kalyan Yojana (PMGKY).

“Rise in minimum support prices accompanied by record procurement, and accelerated wage employment generation through MGNREGS, bodes well for rural incomes and bears testimony to PMGKY’s success in alleviating rural distress... This rise in rural incomes is mirrored in the healthy, though moderated, sales in passenger vehicles, two- and three-wheelers and tractors, and a rebound in vehicle registrations for the first time after March 2020,” it said.

Mega vaccination drive

Asserting that the government was well-prepared to undertake a mega vaccination drive, following the emergency use approval for two vaccines in India, the Finance Ministry said a blueprint was ‘ready with priority for health workers among others, real-time Intelligence Network Co-WIN in place, upgradation of cold-chain infrastructure for last-mile delivery, and ongoing dry runs’.