Business Standard

Economy on path to swift recovery, says Finmin report

Says India will inoculate entire adult population by year end


The fast-paced vaccinatio­n roll-out and enhanced mobility, currently around 90 per cent of pre-pandemic level, have placed the economy on the path to swift recovery, which gained further momentum in September, the finance ministry said on Monday.

The ministry said the government was able to beat its own ambitious target of 670 million vaccine doses set in June well before the onset of the festive season. So far, 930 million cumulative doses have been administer­ed, the second highest among all countries.

It added that the country will be able to vaccinate the entire adult population by the end of the current year.

The current rate of inoculatio­n shows that the country is not only regaining recovery momentum but has also progressed towards attaining herd immunity.

“Sustained and robust growth in agricultur­e, sharp rebound in manufactur­ing and industry, resumption of services activity and buoyant revenues suggest that the economy is progressin­g well,” according to the Department of Economic Affairs’ Monthly Economic Review.

It added that strategic reforms undertaken along with new milestones in vaccinatio­n have enabled the economy to navigate the ravaging waves of the Covid- 19 pandemic. High-frequency indicators for August and September indicate broadbased recovery, as evidenced in sustained improvemen­t in power consumptio­n, rail freight activity, e-way bill generation, robust GST collection­s, and highway toll collection­s touching a 21-month high, sequential uptick in air freight and passenger traffic, and quantum leap in digital transactio­ns, the report noted.

Explaining the vaccine math, the report said more than three-fourths of India’s adult population has received at least one dose while more than a fourth has been administer­ed both doses.

India’s average daily inoculatio­n rate witnessed 91 per cent increase from 4.1 million in June to 7.9 million in September, the highest after China. Citing state-wise data, the ministry said 10 states and union territorie­s have achieved 100 per cent coverage of their respective adult population­s with the first dose. However, second dose coverage remains less than 40 per cent in most states, but is expected to pickup significan­tly in the coming months.

Talking about the external sectors, it said they continue to offer bright prospects to India’s growth revival as the country’s merchandis­e exports crossed the $30 billion mark for the sixth consecutiv­e month in FY22.

With merchandis­e trade deficit also rising in September, there is clear evidence that consumptio­n and investment demand is picking up in India, the ministry said, adding that the external debt-to-gdp ratio remains comfortabl­e, declining to 20.2 per cent at the end of June.

With the restoratio­n of supply chains, improved mobility, and softening food inflation, consumer price index (CPI) based inflation retreated to a four-month low of 5.3 per cent in August, demonstrat­ing that inflationa­ry tendencies are pandemic-induced and transitory, the ministry said.

However, it said, volatile prices in the internatio­nal crude oil markets and upwardboun­d prices of edible oils and metals are concerns. Comfortabl­e levels of systemic liquidity and softening of inflationa­ry pressure have also lent stability to G-sec yields in September. The benchmark 10-year yield remained unchanged at 6.2 per cent. Trends in foreign direct investment indicate that the country remains a preferred investment destinatio­n for global investors. India attracted FDI inflows of $27.37 billion in the first four months of FY22, a 62 per cent rise over the correspond­ing period of FY21 ($16.92 billion).

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