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India may have crossed Covid peak, stage set for economic recovery, says finance ministry

In its economic outlook for September, finance ministry claims economic recovery may have gained momentum on account of govt’s economic package as well as Unlock. 

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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.


Also read: Modi govt removes spending cap on defence for Q3 amid tensions with China


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.


Also read: Govt to borrow Rs 4.34 lakh cr in second half of 2020-21 to meet expenses amid Covid crisis


 

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6 COMMENTS

  1. Madam FM,
    It’s high time to go for a fiscal stimulus first to the agrarian economy, msme & then to infra, hospitality, aviation, manufacturing & services sector. Even after your repeated appeal, coaxing, cajoling some banks, even PSU are imposing higher interest rates on msmes ranging from 13.55% to 14.7% even after 115 bps reductions in repo rates. Would you please look into it to give a real boost to the economy.

  2. Let her go back and make avakkai pickle. She is worth only for that. Doesnt know anything about economics she and this party has systematically destroyed India.

  3. on what basis. the reduction in number of positive cases may be due to reduced number of tests. the fatality is already more than 1 lakh. optimism is not supported by facts. instead of atleast now investing on infra this govt has always tried to sound brave while the conditions are worsening by the day

    • Did you in even read the article? The number of tests also increased over the period for which the numbers are cited. Try reading slowly, take a pause and get back to reading. Maybe that may improve your reading — and comprehension.

      • And maybe for those relying on this article, look at the numbers, they have drastically reduced. Secondly the few huge increase in test in few state is nothing but rapid antigen testing (now go and read how efficient is that).
        Clearly India hasnt reached is peak but clear lies.

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