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.
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