New Delhi: India may have crossed the peak of the Covid-19 pandemic, setting the stage for economic recovery, the finance ministry said in its monthly economic outlook report for September.
The report, citing different parameters, further said that economic recovery may have gained momentum over the last few months on account of the government’s economic package as well as the unlocking of the economy.
“Data for the 14-day period from September 17 to 30 suggests that India may have crossed the peak of Covid-19 case-load. During this period, the seven-day moving average of daily positive cases has steadily declined from about 93,000 to 83,000 while the seven-day moving average of daily tests has risen from about 1,15,000 to 1,24,000,” the report, made public Sunday, said.
The report cautioned that the pandemic is far from over but added that the “declining positivity rate at all-India level sets the stage to further push up the frontiers of economic recovery”.
It also stressed the need for self-protection with due precautions as restrictions on access and mobility are further eased.
According to data with the Ministry of Health and Family Welfare, the total number of Covid-19 cases in India crossed 65 lakh Sunday, with over 55 lakh recoveries.
Report points to record agriculture production
The finance ministry cited a record production of kharif foodgrains to support its case of an economic recovery being underway.
It also referred to an increase in demand in the rural sector, as reflected by an increase in registration of two-wheelers, three-wheelers, and passenger vehicles, and tractor sales, in August, as compared to the year-ago period.
The report also pointed out how high-frequency indicators have improved in sync with global activity. For instance, India’s exports rose more than 5 per cent in September.
Many mobility and logistic indicators have also risen. Rail freight, rail passenger earnings, cargo traffic volumes and domestic aviation traffic have improved, it said.
The report concluded by cautioning that a sustained spread of the virus poses a downside risk to short-term and medium-term growth rate. It, however, pointed out that the structural reforms across various sectors will “strengthen the fundamentals of the economy towards a strong and sustainable long-term growth”.
The Indian economy contracted by a record 23.9 per cent in the first quarter of 2020-21 as the two-month complete nationwide lockdown beginning 25 March brought all economic activity to a halt.
The economy is expected to contract in the second quarter as well with the pandemic showing no signs of abating. For the full fiscal year, the economy is forecast to contract by more than 10 per cent by most economists.