INDIA is poised to grow at 9.5 percent in 2021 and 8.5 percent in 2022, according to the latest projections by the International Monetary Fund (IMF). Last year, India’s economy had contracted by 7.3 percent following the advent of the COVID-19 pandemic. In its World Economic Outlook, India’s projected growth is way ahead of that of the global economy which is forecast to grow at 5.9 percent in 2021 and 4.9 percent in 2022 respectively.
However, the IMF has cautioned that the rapid spread of Delta and the threat of new variants have increased uncertainty about how quickly the pandemic can be overcome. “Policy choices have become more difficult, with limited room to manoeuvre,” the financial body said, warning that the pandemic was darkening prospects in developing countries.
Finance Minister Nirmala Sitharaman has also expressed confidence in the economy saying India is looking at near close to double-digit growth this year making the country one of the fastest-growing economies. During a conversation at Harvard Kennedy School, the minister said she expects the economic growth next year to be in the range of 7.5-8.5 per cent, which will be sustained over the next decade. She said that the World Bank, IMF and rating agencies have all come nearer to this kind of growth number for India. The Finance Minister also expressed confidence that India will attract investments and have the purchasing power to demand the best of things from whoever produces it.
Such positive tidings for the Indian economy are likely to buoy the markets. Over the past few years, Indian economy has been performing well below even some sub-saharan countries. The advent of the pandemic last year and the consequent lockdown dealt a body blow to what was then a nascent recovery. A year on, the world is still struggling with the pandemic. The world economy has been battered. More so, Indian economy which has been worst hit, losing one-fourth of its GDP in the first quarter of the last year to the Covid-19 lockdown. The extended lockdown has hit the economy hard leaving millions of people jobless. It also disrupted the supply lines and forced migrant workers to head home. This subsequently forced the government to open up the economy.
Kashmir economy also suffered. According to an estimate by the local business bodies, the Valley’s suffered a loss of over Rs 50,000 crore. Its fallout on the ground has been grim. Sectors of the economy like tourism, handicrafts, hotel industry, IT, transport etc were crushed. People were forced to shut down their old unviable businesses and start new ones. Here’s hoping that the recovery continues. Double-digit growth is what is needed to lift the millions of people out of poverty and bring lost jobs back.
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