The reserve bank of India on Friday revised its growth projection from -9.5 to -7.5per cent for real gross domestic product of India for 2020-21.
The growth has now taken a positive upward shift. The second half of this finance year is expected to grow faster. The GDP first contracted by 23.9% in the first quarter and 7.5% in the second quarteron the account of the ongoing COVID crisis.
This silver lining in India’s growth rate is the result of our government`s directed policies during the pandemic time.
By a survey it has been shown that there is growing recovery in India’s economy. We can assess it in a few dimensions starting with a study of the economy at the level of individual households. Household incomes remain depressed in June and July, by which time the economy had begun to unlock but the pace of recovery of household per capita incomes was troubling. This may be because the majority of occupations were less remunerative during the lockdown period which continued till july. These types of losses were mainly concentrated among subsistence farmers, smaller businessmen, agri labourers and industrial workers.
The schemes run by the government helped a lot in this pandemic period to create demand and to help in fulfilling the basic needs of these workers. The direct benefit transfer to the woman`s jan dhan account was a great relief. The expanded PDS system helped in meeting the basic food and nutritional needs. The garib kalyan yojana also helped a lot in this section.
The other element to measure recovery is employment level. It has shown a remarkable recovery. There can be two dimensions of it: one, the people who were looking for jobs during the lockdown period got the job, two, the people looking for jobs left the idea of finding one.
The second case can be problematic as the people left the idea of looking for jobs will rise again and increase the number of unemployed people in future.
This can get clearly reflected in “employment to population ratio”. The survey data shows that after a sharp spike in the unemployment rate now it has dropped to pre pandemic levels.
The data shows that unemployment has bounced back but the employment to population ratio has not fully recovered. The fractional good result may be because of government interventions like providing jobs to foreign returned employees and providing jobs to labourers through MGNREGA, for vendors and self employed people providing loan under swanidhi scheme and Mudra scheme.
The tax and non tax government revenue has been rising year after year. Industrial output has also been rising, though it slowed down for a few core sectors in october. It is also reflected in strong GDP numbers from quarter two which is fuelled by the growth in both private consumption and investment demand. This growth is happening but lower than their corresponding levels from a year ago.
This recovery is a good sign for our economy. A few more interventions are needed to run the economy faster. Few national and international factors are associated with the growth which will improve parallel with the economy. The green shoots are appearing.