Niti VC says, India may post 6% growth next fiscal

The Niti Aayog vice chairman noted that green shoots of recovery are already visible in multiple sectors. In 15-16 sectors, businesses are coming back to pre-COVID levels," he said.

Illustration: Dominic Xavier

The Indian economy will start recovering completely by the fourth quarter of the current fiscal and could grow by 6 per cent in the next financial year as green shoots are visible in many sectors where business is back to pre-COVID levels, Niti Aayog vice chairman Rajiv Kumar said on Friday.

Kumar also expressed hope that COVID-19 will begin to taper off from the metros and their economic activity will be normal in the coming quarter.

"I expect the economy to start recovering completely by the fourth quarter.... and achieve a positive growth.

"And next (fiscal) year, it will be about 6 per cent on a low base," he said in a Twitter live session.

Several economists, brokerages and multilateral agencies have forecast a deep contraction in India's economic growth, triggered by the COVID-19 outbreak and subsequent lockdowns.

The Niti Aayog vice chairman noted that green shoots of recovery are already visible in multiple sectors.

"If you notice, in 15-16 sectors, businesses are coming back to pre-COVID levels," he said.

Kumar pointed out that for India, the timing of the COVID-19 pandemic was very unfortunate as the economy was bottoming out in the last quarter of 2019-20.

"Our economy was bottoming out in the fourth quarter of 2019-20 after seeing a low of 4.5 per cent growth but the outbreak of COVID-19 resulted in significant negative impact in the first quarter of this fiscal.

“And that downward momentum could not be reversed because of COVID-19," he observed.

Quoting the finance minister, Kumar said there is always a possibility of another stimulus from the government to boost demand.

"The finance minister has said there is always the possibility of the government coming up with another round of stimulus. Problem is going to be on the demand side.

“The government may look at a stimulus again to revive investment spirit and boost demand," he said.

Kumar also pitched for asset monetisation of public sector undertakings (PSUs) as a large number of them are either under-utilised or unutilised.

"Government holding in land can be brought in as equity and private players can be roped in to do projects in PPP (public private partnership) mode," he noted.

Kumar also said states can mobilise resources by either borrowing from international agencies or internally through effective tax collection.

He said the RBI has done a commendable job by providing liquidity and regulatory support to banks and other financial institutions.

"The problem is now in demand and the private sector will have to expand capacity," Kumar emphasised.

Responding to a query about the challenges before India in the post-COVID-19 period, Kumar said the country will have to design and implement necessary structural reforms to ensure recovery is as sharp and sustained as possible.

Besides, India will have to collaborate with the rest of the world to redesign some global institutions and regulations as some of them have reached the expiry date, he said.

India will also have to collaborate on the technological front as post-COVID technology turbulence can have major unforeseen impact on many countries, he added.

Kumar further said a portable health card is very much called for and the Niti Aayog is working towards that.

He said the think-tank is also working on a 15-year vision document.