Economy to reach pre-COVID-levels by end of FY2022, says NITI Aayog

RBI has also revised its forecast of economic growth for the current fiscal year (2020-21) to (-)7.5% as against its earlier forecast of (-)9.5%.

India’s economic growth is likely to reach pre-COVID-19 levels by the end of the 2021-22 fiscal as the GDP contraction in this financial year is expected to be less than 8%, NITI Aayog vice chairman Rajiv Kumar said on Sunday.

The Reserve Bank of India (RBI) has also revised its forecast of economic growth for the current fiscal year (2020-21) to (-)7.5% as against its earlier forecast of (-)9.5%.

Also read: The RBI tunes in to the economy

“We should reach pre-COVID-19 levels at the end of fiscal year 2021-22 for sure,” Mr. Kumar told PTI when asked about growth projection for the next financial year. He added that the GDP contraction this fiscal is expected at less than 8%.

India’s economy recovered faster than expected in the September quarter as a pick-up in manufacturing helped GDP clock a lower contraction of 7.5% and held out hopes for further improvement on better consumer demand.

Also read: Indian economy to see positive growth in fourth quarter of current fiscal: Niti Aayog VC

Replying to a question on asset monetisation, he said this is ongoing work and it has received attention at the highest level.

“We will continue to pursue this and make sure that the targets of asset monetisation are reached,” Mr. Kumar stressed.

The government is looking to raise ₹2.10 lakh crore through disinvestment in the current fiscal. This includes ₹1.20 lakh crore from Central Public Sector Enterprise (CPSE) stake sale and ₹90,000 crore from sale of government stake in financial institutions.

Talking about banking reforms, he said the sector needs further expansion and an increase in competition because India’s private debt to GDP ratio remains limit to mid 50s.

Also read: Economy may need stimulus on demand side: Niti Aayog Vice-Chairman Arvind Panagariya

Stating that in case of other emerging economy, private debt to GDP ratio is well beyond 100%, Mr. Kumar said that “so we need to increase private debt and this will happen when our banking sector will expand”.

On the Indian agriculture sector, he said the NITI Aayog now is very strongly pushing the programmes for chemical free natural farming which has a potential to reduce cost for agriculture production dramatically and also has very positive impact on the environment. Kumar said the expansion of natural farming all over the country will make Indian agriculture more competitive and it also promises to have a significant positive impact on farmers’ income.

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