India’s 11% Growth expected by Economic Survey in FY2021-22

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It has been estimated in the Economic Survey for 2020-21 that India’s economy is solidly in the middle of a V-shaped recovery and will rebound to record 11% growth in 2021-22.

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The World Health Organization (WHO) on 12th March announced the recent outbreak of the novel coronavirus disease (COVID-19) a pandemic, collapsing Rs. 11.4 trillion of shareholders wealth.

India’s economy has earlier been suffering from down turn in the recent past. Moody’s has devalued India’s growth to 5.3% in 2020 because of downside risks of COVID-19, the slowest in 11 years.

Despite all these in an estimate by the Economic Survey 2020-2021, GDP growth is seen expanding by 11% in the 2021-22 fiscal year.

The Survey has designated the growth a ‘lockdown dividend’ from the country’s strict response to the COVID-19 pandemic.

A V-shaped recovery is characterized by a swift and sustained recovery in measures of economic performance after a sharp economic fall. Due to the speed of economic adjustment and recovery in macroeconomic performance, a V-shaped recovery is a best case framework given the recession.

The survey said, “The V-shaped economic recovery while avoiding a second wave of infections makes India a sui generis case in this unique, synchronized global recession,”. It also added that the roll out of the vaccination can boost the recovery of services sector as well as raise up private consumption and investment.

The survey has also appreciated to the “mature policy response to this ‘once-in-a-century’ crisis provides important lessons for democracies to avoid myopic policy-making and demonstrates the significant benefits of focusing on long-term gains”.

However, low base effect is portraying remarkable growth numbers for India in 2021-22 but coming back to pre-pandemic growth and output level would take more time.