Government intends to spend strongly on infrastructure, says Sanjeev Sanyal
As we have come off the second wave, we are now in a position to open things up and wherever we have opened up the sector, we are seeing strong recovery coming back, Sanjeev Sanyal said.
The Indian economy clocked a GDP growth rate of 20.1 percent in Q1FY22. This was largely in line with a CNBC-TV18 poll which had predicted the number will be close to 20 percent.
This rate of growth is due to a low base effect. In the same quarter last year, India was under a national lockdown after the first wave of COVID infections and the economy had contracted by more than 24 percent.
Agriculture registered strong growth. Manufacturing also staged a comeback. But services sector remains a concern despite an 11 percent growth as GDP is still much below pre-COVID levels.
In an exclusive interview with Shereen Bhan, Sanjeev Sanyal, Principal Economic Adviser said, "The GDP number is a strong number but it is helped by the fact that there was a low base from the previous year's lockdown. As we have come off the second wave, we are now in a position to open things up and wherever we have opened up the sector, we are seeing strong recovery coming back. So demand is not a constraint. Our problem is that we cannot open everything up because of health requirements. So the momentum is strong particularly in manufacturing and construction sector and it is only a matter of it being safe enough from a health perspective for us to open things up and I am quite certain that even travel, tourism all the contact services will also grow quite strong."
He said the government intends to spend strongly on infrastructure.
"Government does intend to spend quite strongly on infrastructure and we did - when we went off the lockdown last year in October, from the period of October to March we spent very strongly on infrastructure and that did bring back demand very strongly. So we intend to do that and we have the fiscal resources to do it."
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(Edited by : Aditi Gautam)
First Published: Aug 31, 2021 10:51 PM IST
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