Chief Economic Adviser (CEA) KV Subramanian has said that India's macroeconomic fundamentals are much stronger, and the country is poised for stronger growth on the back of structural reforms, capex push by the government, clean up in the financial sector and rapid inoculation that will help revive the contact-intensive service sectors. He also said the GDP data for the first quarter reaffirms the government's prediction of an imminent V-shaped recovery made last year. He noted that India's economic growth surged to 20.1 per cent in the April-June quarter of this fiscal, helped by a low base in the year-ago period, amid a devastating second wave of the COVID-19.
Subramanian said the growth during the current fiscal would be higher than the pre-pandemic level, and the GDP growth should be in line with the projection made in the latest Economic Survey. Despite the second wave of COVID-19, he expressed hope that the economic growth during the current financial year would be around 11 per cent. He also stated that the banking sector has now developed a cushion to withstand impending bad loans, he said, adding the net profits of public sector banks (PSBs) increased to Rs 31,816 crore in 2020-21. On the inflation, he said it has witnessed a moderation in July compared to the previous month.
CEA said ‘Our expectation is that the inflation in the next few months should be within that range between 5-6 per cent, but less than 6 per cent despite hardening global commodity prices.’ He said very calibrated monetary policy measures and the supply-side measures that have been taken by the government would keep the inflation in that range. He expressed hope that the household consumption should pick up as the inoculation drive is proceeding at a faster pace.
