Coronavirus: Growth this fiscal depends on the intensity of the pandemic, says FinMin report
Expressing 'cautious optimism' about the country's economic prospects, a Finance Ministry report on Wednesday said actual GDP growth in 2020-21 would be contingent upon the intensity, spread and duration of the COVID-19 pandemic.
The report, prepared by the Economic Affairs Division of the Finance Ministry, took comfort from an IMF note which projected a growth rate of 1.9 percent for the current fiscal year.
"The Government is cognizant of the relative severity of lockdown on economic activity in the country, and is cautiously optimistic about the signals from Indian benchmark equity indices," the report said.
Observing that these are still early days, and COVID-19 is yet to abate, the report said "the country's actual GDP growth in FY 2020-21 will be contingent upon the intensity, spread and duration of the COVID-19 pandemic within national territory."
The report further said that downside risks to India's growth emerge from the high possibility of global slowdown deepening and supply chain disruptions getting exacerbated due to prolonged spread of COVID-19 and lockdowns across countries.
India, it added, continues to tackle the health crisis unleashed by the COVID-19 pandemic and the focus has now shifted to revive the economy which has been debilitated by the lockdown.
The government and the RBI are working towards implementing several fiscal and monetary measures to support affected sectors of the economy, it said.
Earlier this month, Prime Minister Narendra Modi announced a special economic package to the tune of Rs 20 lakh crore, constituting 10 percent of India’s GDP.
The mega economic package was a big welcome relief for the country as business activity had come to a stop following the imposition of lockdown to combat the coronavirus outbreak. The economic package is on the lines of what other countries like the US or Japan has unveiled, with their package running into billions of dollars.
Modi also stressed the importance of the country becoming self-reliant, saying it is the only path ahead for the country, and expressed that confidence that 21st century belongs to India.
(Disclaimer: Additional background information has been added to this PTI copy for context)