The V-shaped recovery in the first quarter of fiscal 2021-22 despite the COVID-19 second wave is an indicator of India's strong macroeconomic fundamentals, according to the finance ministry, which, in its latest monthly economic review, expressed concern over high incidence of COVID-19 cases in Kerala and Maharashtra and underlined the need for better pandemic control and management in these two states.
Kerala remains a concern accounting for around 60 per cent of daily new cases in the country and reporting the highest daily deaths across all states, it said.The V-shaped recovery in the first quarter of this fiscal despite the COVID-19 second wave is an indicator of India's strong macroeconomic fundamentals, according to the finance ministry, which has expressed concern over high COVID-19 incidence in Kerala and Maharashtra and underlined the need for better pandemic control and management in these two states.#
The Indian economy grew by 20.1 per cent in the first quarter of this fiscal reaffirming, "India's resilient V-shaped recovery despite an intense second wave," it said.
India’s economy had dipped by 24.4 per cent during the first quarter of the previous fiscal.
The report said the agriculture sector continues to offer comfortable prospects with kharif sowing at 101 per cent of normal levels as on September 3, despite a 9 per cent deficient monsoon so far in the year.
Record-high paddy procurement and increasing tractor sales augur well for strengthened rural demand in the coming months, it said, adding, the industry is steadily gaining lost ground with June's index of industrial production witnessing a broad-based growth, having recovered close to 95 per cent of pre-pandemic levels of June 2019.
More recently, the eight-core industries index for July 2021 rose by 9.4 per cent year on year (YoY) with all sectors except crude oil and refinery products surpassing pre-pandemic levels, it said.
"The fast-paced recovery is further evident in growth of power consumption, rail freight, highway toll collections, e-way bills, digital transactions, air passenger traffic and robust GST collections. India's PMI Composite index including both manufacturing and services is comfortably placed at 55.4, signalling commencement of economic expansion," it said.
On the flip side it said, the looming fear around the Delta variant of COVID-19 has once again cast a shadow necessitating sustained precautions against it with greater focus on testing, tracking and adopting COVID-19 appropriate behaviour.
On the revenue collection side, it said, the central government finances improved during April 2021, to July 2021 over the corresponding period of previous year, with both direct and indirect taxes showing a significant YoY growth.
Observing that the robust recovery in tax collections augurs well for the government to provide the required budgeted support to the economy, the report said, the recent decision to repeal the retrospective tax law introduced in 2012 further reflects the commitment of the government towards providing a stable and predictable tax regime for all stakeholders.
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