New Delhi. Chief Economic Advisor (CEA) KV Subramaniam said on Friday that the rapid revival of the economy shows that its performance in the current financial year will be better than the projections so far. He said this in the second quarter as the economy contraction was lower than anticipated. Subramaniam said that the final figure should be better than the estimates made by various institutions, including the Reserve Bank of India, on GDP (GDP) in the current financial year.
The central bank has forecast a 9.5 percent decline in the economy in 2020-21. The performance of India's economy has been better than expected in the July-September quarter of the current financial year amid the global epidemic crisis. According to the latest government data, manufacturing sector GDP (GDP) declined sharply by only 7.5 per cent in the second quarter, while a major contraction was anticipated. It increased by 4.4 percent in the same quarter a year earlier. It is expected to improve further in the coming years due to better consumer demand.
The economy suffered a major decline of 23.9 percent in the first quarter of April-June of the current fiscal year 2020-21 amid tight public restrictions implemented to prevent the spread of the corona virus epidemic. Comparing the estimates of several analysts, Subramaniam said the second quarter figures are quite encouraging. The data (PMI, electricity consumption, garland transportation etc.) was indicating this. He said that the sustainability of revival in the economy depends on the outbreak of the epidemic. He said that the first spurt in infection reached its peak in September and after that it has reduced somewhat. But there is a need to maintain vigilance during the winter months. Describing the scenario for the near future, he said, "We should expect to be cautious and vigilance is necessary given the impact on the economy due to the Corona epidemic."
When asked about the estimate for the entire financial year, the Chief Economic Advisor said, "... things which were seen in the first and second quarter and ... which are going to see good improvement, I think according to the economy There is a possibility of better performance. ”Subramaniam said, however, given the current uncertainty, it is difficult to tell whether the economy will come in positive terms in the third quarter or the fourth quarter. He said, "I anticipate that we will definitely move on the path of revival but it requires that the epidemic remains under control." Regarding food inflation, the CEA said that the inflation rate of food items moderated in the third quarter. It is being closely monitored by the government.