Niti Aayog Vice Chairman said that Indian economy is projected to increase by over 10% in the current fiscal facilitated by a record kharif crop and bright rabi prospects. This will increase rural demand and spur the revival in the manufacturing sector with improving capacity utilisation.
However he cautioned that inflation is emerging as a key risk to sustainable economic recovery with constraints in supply chain and increasing energy prices.
He also added that the significant increase in exports will also boost economic growth and employment generation.
The Niti Aayog Vice-Chairman also noted that gradual pickup in contact-intensive services sector is further likely to support the growth momentum. India achieved the landmark milestone of administering 1 billion Covid-19 vaccine doses on 21 October.
He also said that the rapid vaccination drive will ensure that the risk of future wave is minimised.
The Reserve Bank of India (RBI) has lowered its growth projection for the current financial year to 9.5% from 10.5% estimated earlier, while the IMF has projected a growth of 9.5% in 2021 and 8.5% in the next year.
Kumar highlighted that India sustained its pace of economic recovery in September 2021 as reflected by acceleration in Manufacturing PMI at 53.7 (52.3 in August 2021) offset by a modest deceleration in services PMI at 55.2 as against 56.7 in Augugst 2021.
He added that power consumption, railway freight, GST collections, e-way bills, etc were the other high key frequency indicators, also show continued pickup in economic activity.
The Index of Industrial Production (IIP) saw a growth of 11.9% YoY in August 2021 with core sector output growth of 11.6% YoY reflecting strong activity in industrial and infrastructure sectors, said the eminent economist.
Download Money9 App for the latest updates on Personal Finance.