Pandemic-hit Indian economy to see positive growth in Q4 of 2021, says Niti Aayog VC

Niti Aayog vice chairman Rajiv Kumar on Wednesday said that Indian economy reeling under pandemic-induced degrowth is set to see positive growth in the fourth quarter of financial year 2021.

“The second quarter GDP figure (contraction of 7.5 per cent) reflects that the economy is coming out of this pandemic-induced degrowth phase and my expectation is that in the third quarter, we will achieve the same level of economic activity as the year-ago period.

“And the fourth quarter will show a small but positive growth over the previous year because the government has... ushered in many structural reforms and some more are in the pipeline,” Kumar told news agency PTI.

These reforms, the NITI Aayog chief said, will provide a very strong foundation for accelerating the economic growth in the fiscal year 2021-22 and beyond. “we have now shrugged off the negative impact of the pandemic and are moving towards a sustained high growth trajectory in the coming years,” he said.

In line with RBI’s forecast, Kumar said that India’s growth figure in the current fiscal year will be better than negative 9 or 10 per cent.

Last week, the Indian economy shrank by 7.5% in the second quarter of 2020-21, doing better than most analysts expected it to, although the touch of grey to this silver lining was provided by the fact that with the second consecutive quarterly decline, it is technically in recession -- a result of the lasting effect of the 68-day lockdown enforced to slow the coronavirus disease, and some lingering restrictions.

A Reuters poll of economists had projected an 8.8% contraction in the September quarter from a year ago. The 7.5% decline is a sharp improvement from the 23.9% contraction seen by the economy in the previous quarter, although much of India spent two entire months of that period almost completely under lockdown. The recession is India’s first in at least 24 years.