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India's economy exits from recession, recovery seen gathering pace
India’s economy returned to growth in the three months to December and the recovery is expected to gather pace as consumers and investors shake off the effects of the coronavirus pandemic, economists said.
New Delhi: India’s economy returned to growth in the three months to December and the recovery is expected to gather pace as consumers and investors shake off the effects of the coronavirus pandemic, economists said.
Fiscal and monetary policy could boost India’s recovery prospects, they said, amid signs of a pick-up in consumer demand and government spending.
Prime Minister Narendra Modi has launched plans for a massive vaccination drive, while outlining a slew of tax incentives to boost the manufacturing sector.
Gross domestic product grew 0.4% in October-December compared with the same period a year earlier, data released by the National Statistics Office on Friday showed. That compared with revised contractions of 7.3% in July-September and 24.4% in April-June.
Investment recorded its first growth since December 2019, growing at 2.6% compared to a revised 6.8% fall in the previous quarter, while weakness in consumer demand eased.
Annual growth of 3.9% in the farm sector and 1.6% in manufacturing during the three months to December raised hopes of an early recovery as the government rolls out plans to distribute COVID-19 vaccines to India’s 1.4 billion people.
The Reserve Bank of India (RBI), which has slashed its repo rate by a total of 115 basis points since March 2020 to cushion the economic shock of the pandemic, has projected growth of 10.5% in the fiscal year that starts in April.(Reuters)