As the post pandemic economic activity in the country picks up pace, the Finance Ministry has said that India is well-placed on the path to swift recovery with growth impulses visibly transmitted to all sectors of the economy.
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It said that Atmanirbhar Bharat Mission encapsulating major structural reforms continues to play a critical role in shaping India's economic recovery, both through the signalling of business opportunities and expansion of spending channels.
Armed with necessary macro and micro growth drivers, the stage is set for India's investment cycle to kickstart and catalyse its recovery towards becoming the fastest growing economy in the world, the report said.
India's economic recovery has gathered steam in the festive season, recording a decade high Diwali sales of Rs 1.3 lakh crore as per Confederation of All India Traders. Improving Covid-19 situation amid high business and consumer spirits has delivered sustained economic recovery in October, 2021 as well.
The finance ministry report, however, said that the global economic recovery continues to be impacted by prolonged supply constraints and input cost inflation. Yet IMF in its October, 2021 update foresees improved global growth prospects at 5.8 per cent in 2021 and 4.9 per cent in 2022 triggering a coterminous global trade growth, by volume, at 9.7 per cent and 6.7 per cent respectively. World Trade Organisation's October forecast also confirms favourable trade prospects underpinned by resurgence in global economic activity and vaccine dissemination. This augurs well for India's export performance in the near future lending credence to IMF projecting India to become the fastest growing economy, among major countries, in the current and the following year, said the DEA report.
The report had identified the external sector to play a critical part in India's economic revival with exports visibly emerging as an engine of growth. India's merchandise exports in October, 2021 have now crossed the US$ 30 billion mark for the seventh consecutive month. With merchandise imports in FY 2021-22 until October, 2021 also crossing their pre-pandemic 2019 levels, rapid recovery of domestic output is evident. FDI achieved the US$ 20 billion mark in the first five months of FY 22 as it did in FY 21. India's foreign exchange reserves stood comfortably at US$ 640.1 billion as on October 22, 2021, providing cover for around 14 months of imports projected for 2021-22.