Stressing that the Indian economy is on the path to recovery, Finance minister Nirmala Sitharaman tells Fortune India that the India will be one of the fastest growing economies globally in the next couple of years.
“Indicators like electricity consumption, core industries, demand for raw materials, all of them indicate the economy is on the recovery path,” Sitharaman says. Refusing to peg a number to India’s economic growth prospects in coming years, Sitharaman says her priority is to ensure “facilitation is extended to every aspect of the economy” so that the desired growth comes back.
In an exclusive interaction with Fortune India Sitharaman says macro indicators point to recovery.
“We have also had a credit rating agency indicating to us that India’s position is now assessed as being stable, and the economy reviving. So, this year growth is on a low base. We will have a good number next year because we’re building up on it. India will also be one of the fastest growing economies,” Sitharaman said in the interaction.
About her expectations on growth rate in coming years, Sitharaman says, “I am not going to engage in the speculation of numbers. My business is to make sure that all kinds of facilitation is extended to every aspect of the economy, and difficulties removed.”
“Particularly, difficulties in the context of recovery are speedily removed so that the recovery happens the way we wish it to happen. Therefore, I look at facilitating as much as asked for,” She added.
In its review of the economy for September, the ministry of finance said, “Industry is gaining lost ground, with the Index of Industrial Production (IIP) witnessing broad-based Y-o-Y growth of 11.5% in July 2021, led by growth in capital goods and consumer durables.
“Acceleration in annual growth of eight-core industries index in August at 11.5% to recover 104% of its corresponding pre-pandemic level portends further strengthening of industrial growth in coming months. In synergy, rise in PMI Manufacturing to 53.7 on the back of improved consumer demand and business confidence, coupled with PMI Services clocking a 55.2, establish a robust recovery,” the report added.
During April-June FY22, gross domestic product growth has sprung back to 20.1% compared with a contraction of 24.4% during the same period of the previous financial year on account of the national lockdown from March 25 to curb the spread of the pandemic. It may be noted that India’s annual economic growth rate had been slowing down since FY18.
After 8.2% GDP growth in 2015-16, India’s economic growth fell to 7.1% in 2016-17 only to grow marginally in 2017-18 to 7.2%. In FY19, GDP growth came down to 6.8% and hit 4% in FY20 owing to the slowdown and the onset of the contagion in India. With the onset of the pandemic and the lockdown, the Indian economy contracted 7% in 2020-21.
Things are looking up on the back of 20.1% during April-June this year. The quarterly numbers are also set to improve as Q1 numbers were impacted by the second wave of the pandemic, which led to localised lockdowns across states. It may be noted that India’s GDP for April-June of FY2022 fares better than major global economies. During the period, the U.S. grew at 6.5% and China 7.9%, while the UK registered 4.8%.