Manufacturing recovery looking robust; two-fold downside risk: CEA Krishnamurthy Subramanian

So, how strong is the recovery and what are the downside risks the government is factoring in? To discuss all this data and more Shereen Bhan spoke to KV Subramanian, Chief Economic Adviser to the Indian government.

On downside risk Subramanian said, “The downside risk is two-fold, one is how the pandemic spreads in the winter month. So far it seems to be fine, it doesn’t look like the peak that we crossed in September is likely to be reached anytime soon, so that is something that is making me cautiously optimistic on the pandemic itself. Second is about the uncertainty itself. The combination of both of these how the pandemic spreads and the fact that there is still some uncertainty is what I would lay out.”

On manufacturing recovery CEA said, “In the analysis presented after the Q1 GDP print, we had mentioned that high frequency indicators do suggest a V-shape recovery especially in manufacturing. I do think that the manufacturing recovery is indeed looking robust, partly it is also reflecting the reforms that have been done.”