Chief Economic Adviser Krishnamurthy V. Subramanian | Twitter
Chief Economic Adviser Krishnamurthy V. Subramanian | Twitter
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New Delhi: India’s top economic adviser said a V-shaped recovery for the economy is possible this year, provided a vaccine is found to contain the Covid-19 pandemic.

“The recovery will happen after that uncertainty from the health side is taken care of,” Krishnamurthy Subramanian, the chief economic adviser to the finance minister, said in an interview with Haslinda Amin at the Bloomberg Invest Global virtual conference. “If it so happens that in the latter half of the year we have the vaccine, then one can anticipate V-shape recovery starting in the second half.”

In the absence of a vaccine, the economic recovery will have to wait until next year, although that too is likely to be V-shaped given the experience after the Spanish flu of 1918, he said.

India’s manufacturing and services activity took a heavy knock in the quarter started April owing to a nationwide lockdown to stem the coronavirus pandemic. That’s put Asia’s third-largest economy on course for its first annual contraction in more than four decades this year, with some economists seeing a return to 8%-plus growth rates taking as long as a decade.

But Subramanian is confident that support measures unveiled by the government, in addition to a low-base effect, will help lift economic growth next year.

What Bloomberg’s Economists Say

“The extended lockdown, cratering production, still-rising Covid-19 cases, inadequate fiscal policy support and limited space for further conventional monetary easing mean the recession will be more pronounced than anticipated and a V-shaped recovery out of reach.”

— Abhishek Gupta, India economist

India’s government unveiled a Rs 21 lakh crore ($276 billion) package to support the economy, including easing access to credit for small businesses and offering cheap loans to workers and farmers.

“Because of the measures we have taken on productivity, we do anticipate growth to be back actually to the high level of 7% and 8% for sure,” Subramanian said. – Bloomberg

Also read: New surge in coronavirus cases jolts prospects for global economic recovery


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5 Comments Share Your Views


  1. The Covid-19 pandemic and its enormous pressure on government seems unprecedented ,perhaps
    comparable to Spanish Flu of 1918 from the way it is showing no signs of abatement all over the world.
    In India ,it has grown deceptively when we were taking credit for declaring an early lock down as keen
    preventive measure.In spite of lapse nearly 3 months ,its vigor has not declined and is like an elephant
    gone astray causing harm to people. When it will be controlled or how long it will last are difficult to
    predict though the causalities are not as high. No doubt CEA ‘s guess that much depends on the arrival
    of vaccine is right,but that again is uncertain.We can with consultations of doctors explore our indigenous systems of medicine,like Siddha and Aurveda also for a possible remedy.
    Unless we are able forecast downturn effect ,whether it is 6 months or 9 or more( Spanish flu lasted 15
    months) of this Covid-19 impact ,it is unlikely there will be a V shaped recovery of the Economy,
    The approach should be to evolve stimulus packages as and when needed and as and in the way it is
    needed by the affected population. Government should not worry about revenue loss as many sectors
    of Industry have made losses themselves, Govt. should act with a large heart and great munificence
    and the people will respond better.More importantly the pandemic monitoring should be done
    bringing in the doctors fraternity and global wherewithal regarding Vaccine and other controlling measures.

  2. Indiaeconomy is slowly getting into depression. If at all there will be recovry in shorter term , it will be only “L” shaped. May be after a year or so the graph may show slight upward curve.


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