India headed for a long and lasting growth impetus: CEA Subramanian
All high-frequency indicators till February were shaping up very well, said Finance Ministry Chief Economic Advisor K Subramanian
Many sectors are on a recovery path and the reforms undertaken will deliver a long-lasting growth impetus, says Krishnamurthy Subramanian, chief economic adviser in the Finance Ministry. He believes India is a growing economy and it will get back to high growth.
Subramanian told LiveMint that the uncertainty relating to the pandemic will remain not just in India, but everywhere, till a vaccine is discovered and people are inoculated or till the time people get the confidence that a vaccine is developed and it is only a matter of time that they will get inoculated. He explained that compared to previous crises where consumer sentiment was affected by economic factors, in this case, the sentiment is affected by a health factor.
In regards to GDP, the chief economic adviser pointed out that the World Economic Outlook showed that the number of countries where GDP per capita is going to decline this year is by far the largest in 150 years.
“We are six months into the pandemic and we are expecting the vaccine by early next year but till the vaccine does not come, there will be residual uncertainty which is undeniable. Subramanian, about the fact that the economy was slowing down before COVID-19 hit India, said it is not supported by data. He argued that it was the result of an elementary conceptual misunderstanding. “If you look at data, all high-frequency indicators till February were shaping up very well,” the CEA said. “If COVID-19 had not struck in March, given the way the indicators were looking, we would have certainly had a much higher growth rate than 3.1 per cent in March quarter of FY20, and in fact would have been higher than the Q3 growth rate of 4.1 per cent as well.”