India on V-shaped recovery path from 2nd quarter: Finmin

Says need to re-orient policy mix

The finance ministry has said the country will have to reorient its policy matrix to give specific attention to skilling, health care, agrarian supply chains, factor markets, infrastructure, information and communications technology (ICT), start-ups and financial inclusion.

According to the ministry, this will help reconstruct the economy and build resilience for the postcovid world.

In its monthly economic report for August, the department of economic affairs (DEA), under the ministry, asserted that the economy is on a Vshaped recovery path from the second quarter.

This comes as the country starts unlocking after hitting the rock bottom of 23.9 per cent contraction in the first quarter.

It attributed its assessment to factors like tractor sales, fertiliser sales, steel consumption and prodution, cement production, power consumption, e-way bills, highway toll collections, GST collections and digital transactions, among other data, after June.

It said India’s economy contracted the most compared to the advanced world due to the severest lockdown measures announced by the government. Owing to this, the Covid-19 casualties have been one of the lowest here.

The DEA said the world after Covid-19 will be different with structural changes in production, consumption and work patterns.

In this connection, it called for specific attention to areas cited above and said progress there will sustainably boost economic growth in the years to come. Agriculture: The department said agriculture has emerged as a resilient silver lining in the current scenario. It is the only sector which grew by 3.4 per cent in the first quarter of 202021, whereas every other sector contracted, pulling down the GDP.

ICT: With Covid-19 necessitating business closures and pushing footfalls drastically below normal levels, the services sector continues to be the worst hit with demand for services plummeting across the globe, it said. With the services sector being the biggest employer in the nation, building sufficient flexibility for service organisations during the pandemic and beyond is paramount to India’s economic recovery.

Skilling: In the face of job losses, the employeremployee relationship also demands structural changes, the report said. Moving away from fixed job roles and bringing role flexibility in the workforce will enable businesses to better meet post-pandemic challenges.