India has not only caught up with its pre-pandemic output in the second quarter of the 2019-20 financial year, but is also expected to do so for the full year too, a finance ministry report said on Saturday. The report also asserted that preliminary evidence suggests the impact of the Omicron variant is expected to be less severe due to rapid vaccination.
It said India will be among only a few economies in the world to rebound strongly from Covid-induced economic contraction of 2020-21.
India’s economic recovery is expected to gain further strength in the remaining quarters of this financial year, as evident from 19 among 22 high frequency indicators in September, October and November of 2021 crossing their pre-pandemic levels in the corresponding months of 2019, the report said.
Omicron may pose a fresh risk to the ongoing global recovery, the report said, though it assessed that “ ...preliminary evidence suggests that the Omicron variant is expected to be less severe”.
The report asserted that India’s recovery is aided by rapid vaccination covering more than 90% of its adult population with at least one dose. It said that this has helped daily Covid cases decline further in November, with month-end active caseload reaching its lowest since June 2020, concentrated in only few states of the country. Around 80% of the active cases are in Kerala, Maharashtra, Tamil Nadu, West Bengal and Mizoram.
The report said the pandemic has led to considerable human and economic costs, setting countries back on their development goals. 2021 is thus a “catch-up” year for the global economy including India, trying to recover the prepandemic output level of 2019, according to the report. “The MPC (monetary policy committee) in its December statement has maintained the growth forecast of 9.5% during FY 2021-22, implying a full recovery and a 1.6% growth over pre-pandemic GDP level of FY 2019-20,” said the report.
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