9After clocking a growth rate of 20 per cent plus in the April-June quarter (Q1), the economy may see much better recovery during the remaining three quarters of the current fiscal year, a Finance Ministry report on Thursday said.

“A broad-based rebound in several leading macroeconomic indicators in July and August offer bright prospects for India’s continued economic recovery. With the government and the RBI’s unflinching commitment to put the economy back on track, India is poised for an even faster recovery in the next three quarters of FY22,” the monthly economic report of the Economic Affairs Department said.

Further, it said that rapidly expanding vaccination coverage and experience gained in pandemic management provide confidence that the recovery can continue even in the event of a third wave. The RBI’s estimates for the second, third and the fourth quarters are, respectively, 7.3 per cent, 6.3 per cent and 6.1 per cent.

V-shaped recovery

Highlighting first quarter GDP growth, the report said this reaffirms India’s resilient V-shaped recovery despite a brutal second wave. “Having posted an almost 180 degree turn-around from a sharp contraction in Q1 of FY21, to recover more than 90 per cent of the pre-pandemic Q1 output of FY20, the V-shaped economic recovery remains intact,” it said.

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Further, it said the momentum of the recovery swwn since the second half of FY21 did get disrupted by the second wave. However, the rapid surge in vaccination coverage from 6.4 per cent of the adult population with at least first dose in Q4 of FY21 to 31.9 per cent in Q1 of FY22 contained the sequential decline in output. The vaccination coverage now stands at more than 60 per cent of the adult population as of September 8.

Mentioning revenue buoyancy, the report said better collection not just in direct taxes but also in indirect taxes augurs well for the government in providing the required support to the economy. “Capital expenditure registered a 14.8 per cent YoY growth during April-July 2021, mainly focussed on road transport, highways, railways and housing,” it said.

 

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