Supply-side push from reforms and easing of regulations to help
India’s economy is set to witness a V-shaped recovery as the country’s growth engine is back on track after a coronavirus-led slowdown, the Pre-Budget Economic Survey said on Friday.
The economy may see an 11 per cent growth in the next financial year, while Gross Domestic Product (GDP) could see a contraction of 7.7 per cent in the current fiscal ending March 31, 2021. India witnessed its last annual contraction of 5.2 per cent in the fiscal year 1979-80.
Amid farmers’ protests which entered the 64 days over the farm laws, the Economic Survey termed the three agricultural reform laws as a “remedy”, building a case for its acceptance among the farm community that has strongly opposed it.
According to the survey, the agricultural reforms would enable farmers to sell where they get the “best deal” and thereby, allow competition, an essential condition for the welfare for the small farmer.
The Economic Survey said that the Centre’s recent reforms in the agricultural markets will enable the creation of “One India, One market” and offer more opportunities to farmers.
At the same time, services, manufacturing and construction were most hit by the lockdown that was imposed to curb the outbreak of the Covid-19 pandemic.
“After an estimated 7.7 per cent pandemic-driven contraction in 2020-21, India’s real GDP is projected to record a growth of 11.0 per cent in 2021-22 and nominal GDP by 15.4 per cent. These conservative estimates reflect upside potential that can manifest due to the continued normalisation in economic activities as the rollout of COVID-19 vaccines gathers traction,” the survey said.
The growth will further be supported by supply-side push from reforms and easing of regulations, push for infrastructural investments, boost to manufacturing sector through the Productivity Linked Incentive Schemes, recovery of pent-up demand for services sector, increase in discretionary consumption subsequent to roll-out of the vaccine and pick up in credit given adequate liquidity and low-interest rates, it said.
