General George S Patton, who commanded the Seventh United States Army in the Mediterranean theatre of World War II once said, “Success is how high you bounce after you hit rock bottom”. As the fears of the pandemic recede, the test of resilience and our ability to bounce back is now. Self-reliance will be a huge stepping-stone as the country starts on a path to recovery.
In early 2019, it was predicted at
World Economic Forum that the Indian economy would grow manifold owing to its resilient nature to become the world's second-largest economy by
2030, surpassing even the United States. Cut to early 2021, and India is charting a path to recovery after one of the most unprecedented economic setbacks. Witnessing the green shoots of recovery, the Reserve Bank of India revised its forecast of economic growth for the current fiscal year (2020-21) to (-)7.5 percent in December 2020 compared to its earlier forecast of (-)9.5 percent. The second half of the fiscal year is certainly expected to show positive growth.
One thing that is working in favour are the vaccines that now under distribution, and a lot of efforts are already in pipeline to make India inoculated as early as possible. This is further strengthening confidence in the fact that sooner than later, the world and India, will be back on their feet.
India has a gamut of industries working closely with each other, to emerge stronger out of the pandemic. In fact, most of the sectors used this crisis to innovate their existing business models to ensure business continuity. They not only co-created but also conceptualised from scratch as to what can be made and leveraged owing to the shift in behavior and the need of the hour.
At various stages, the government supported the Indian economy, with stimulus packages including Atma Nirbhar Bharat. These incentives will not only help businesses to get back on their feet but also increase their resilience for the future. The government announced 12 key measures to induce the required stimulus for the economy which stood at Rs 2.65 lakh crore in the third stimulus package. From supporting agriculture to boosting the Indian Capital and Industrial Stimulus, the government’s steps to making India more self-reliant will bear fruit over short and long-term periods.
Heralding optimism, a recent report by ASSOCHAM highlighted that India's economy is showing significant signs of a 'V-shaped' recovery as we enter 2021. Factors like returning consumer confidence, robust financial markets, an uptick in manufacturing and exporters braving it out in the global market with a never-say-die spirit are playing a huge role. This also validates the fact that the Indian economy has a bright future despite the pandemic. It wouldn’t be inaccurate to say that it is bouncing back with a vengeance.
Moreover, the Union Budget 2021-22 has been designed with a strong vision for a self-reliant India, which was laid by the government in the early days of the pandemic in the form of ‘Aatmanirbhar Bharat’. India’s finance minister understood the need of the hour and will boost investment in infrastructure and technology integration, through capital expenditure, which will, in turn, augment the overall economic growth. The government has given special attention to vital areas such as healthcare, agriculture, infrastructure, and startups, which will contribute hugely towards economic growth. This budget will bolster India as a hub for global manufacturing as well.
An encouraging uptick in consumer demand coupled with the increased ability of the system to cope with healthcare needs, are increasing optimism in the economy. India’s growth story has a lot of potential, being one of the largest consumer markets across the globe. The vision to be a $5 trillion economy with a focus on becoming self-reliant and pioneering policy reforms to improve ease of doing business, will boost economic recovery through the year.
Owing to these factors, many countries are considering manufacturing in India, which will continue the inflow of global investment. The FDI influx will not only drive up GDP but also per capita income, which can be circulated back in the economy in the form of consumer spending. Undoubtedly, the Indian economy is poised for a healthy recovery in 2021 to strong growth from 2022 onwards.
—Alexander Reisch is Managing Director, IPM India Wholesale Trading Pvt Ltd. Views expressed are personal
(Edited by : Ajay Vaishnav)
