The Indian economy contracted by a historic 23.9 per cent in the first quarter of 2020-21 on account of the impact of the coronavirus pandemic.
It can be noted that the economic growth has been on a downward spiral for over three years till it went into a contraction mode.
Having gone through a rough patch on account of the coronavirus pandemic, the Indian economy is expected to record a double-digit growth at 10 per cent in 2021-22, according to a report. “Economic activity is showing signs of traction. The PMI Manufacturing Index is at its highest since 2008,” said the report titled ‘Voice of Asia’ prepared by Deloitte.
The economy contracted by a historic 23.9 per cent in the first quarter of 2020-21 on account of the impact of the coronavirus pandemic. The contraction, however, narrowed to 7.5 per cent in the second quarter. Stronger car sales, rising production of finished steel and diesel consumption, and higher goods and services tax revenue collections indicate that the economy has bounced back strongly since ‘the unlock’, backed by pent-up and festive season demand, the report said.
Sustaining this rebound could be a challenge next year, if coronavirus infection cases continue to be high, it added. However, it said, “We expect India’s GDP (gross domestic product) to rebound to double digits in FY2022 after contracting in FY2021.”
According to the report, three drivers — inclusive job growth, a robust services sector rebound and a sustained recovery in private demand — will ensure a sustained economic revival and rehabilitation. The government’s effective policy measures together with prudent business strategies should help the economy grow strongly from the next financial year, it added.