Indian economy shows signs of revival: Centre
New Delhi, July 19: Asserting that the Indian economy is showing signs of revival since the peaking of second Covid wave in May, the government on Monday said the country’s strong fundamentals and market size will continue to attract market-seeking greenfield investments.
Quoting the World Investment Report 2021, finance minister Nirmala Sitharaman in a written reply to the Lok Sabha said FDI inflows into India rose by 25.4 per cent to reach $64 billion in 2020, from $51 billion in 2019, becoming fifth largest recipient in the world in
2020, up from eighth position it held in the previous year.
However, the announced greenfield projects in India contracted by 19 per cent in 2020, she said, adding that this decline is significantly lower than the 44 per cent decline in developing economies.
“As has been witnessed in overall FDI inflows, India’s strong fundamentals and market size will continue to attract market-seeking greenfield investments,” she said.
In a reply to another question, minister of state for finance Pankaj Chaudhary said India’s forex reserves as on June 25,
2021 stood at $608.99 billion.
India has emerged as the fifth largest foreign exchange reserves holder in the world after China, Japan, Switzerland and Russia, he said in a written
reply to Lok Sabha.
“India’s foreign exchange reserves position is comfortable in terms of import cover of more than 18 months and provides cushion against unforeseen external shocks. The government and RBI are closely monitoring the emerging external position calibrating policies or regulations to support robust macroeconomic growth,” he said.
Replying to another question Chaudhary said “the Indian economy is showing signs of revival since the peaking of the second wave in the first half of May 2021 on the back of targeted fiscal relief, strong push for capital expenditure, RBI’s monetary policy measures, and a rapid vaccination drive.”
This is reflected in movement of several high frequency indicators like Eway bills, power consumption, rail freight, UPI transactions, vehicle registrations, etc, he said.
With regard to India’s contraction in Gross Domestic Product (GDP) by 7.3 per cent in 2020-21, Sitharaman said this reflects the unparalleled effect of the ‘once in a century’ Covid-19 pandemic and the containment measures that were taken to control the pandemic.
The fundamentals of the economy remained strong as gradual scaling back of lockdowns, along with the astute support of Atma Nirbhar Bharat Mission placed the economy firmly on the path of recovery from the second half of FY 2020-21, she added.
According to the World Bank’s Global Economic Prospects June 2021, she said, global growth for 2021 has been revised upward to 5.6 per cent, largely due to the sharp rebound in major economies driven by continued vaccination and substantial fiscal support.