Will India Be Able To Manage Global Blowout Again Over Omicron Spread?
The new variant of Covid-19, Omicron is expected to create a new risk to the global recovery. The Indian Minister of Finance while sharing the Monthly Economic Report said that the preliminary evidence suggests that the Omicron variant is expected to be less severe in India with the pace of vaccinations done so far.
There are strong reasons for the growth of India’s economy in the last two quarters of the financial year. Amongst the various reasons for growth are the current upbeat market sentiments, quick and widespread vaccination in the country, robust external demand, and continuous policy support by the Reserve Bank of India (RBI) and the government.
In the financial report, it was shared that India’s Gross domestic product (GDP) in the second quarter has shown a remarkable growth of 8.4 percent year-on-year. This growth shows a 100 percent recovery of the pre-pandemic output in the corresponding quarter of the financial year 2019-20.
It is not just the second quarter but the entire year is expected to grow beyond the pre-pandemic numbers, as per the data from the finance ministry’s report.
There are only few countries in the world that have reported four consecutive quarters of growth (third and fourth quarter of 2020-21 and first and second quarter of 2021-22) amid the pandemic. Amongst the other reasons, the top was the revival of the manufacturing sector, the complete revival of services, and uniform growth in the agricultural sector.
The recovery was driven by a revival in services, full recovery in manufacturing, and sustained growth in the agriculture sector. On the other side, there has been increased demand in the exports and investment, rising by 17 per cent and 1.5 percent respectively over their pre-pandemic levels.
Also, there has been a drastic increase in private consumption of 88 percent in first quarter and 96 percent in the second quarter, this being the emerging macro growth driver. The supply side has also shown great recovery with the real gross value added (GVA) in agriculture continuing to be higher than its pre-pandemic level, another two sectors which has contributed on the supply side are manufacturing and construction, these two also have surpassed their pre-pandemic levels to emerge as key drivers of growth.