Nirmala Sitharaman has optimistically stated that India is back on the road to sustained recovery. She stated, “India’s growth is definitely on the higher growth benchmark and also it is sustained.” On the basis of high frequency indicators such as purchasing mangers’ index (PMI) in manufacturing and services, e way bills, good and services tax (GST) and rail freight collections, she maintained that India is back on the growth path. This also indicates towards increased consumption in the economy and points towards clear, positive economic revival.
Reportedly, this fiscal quarter also saw increase in Indian exports by 40%. This was mainly due to the surge in demand for engineering items, chemical substances and low value life style merchandize like carpets. Iron, aluminum and ferro- metals also saw double digit growth in exports due to increased demand from countries like China, Germany, Thailand and Singapore.
With covid woes of India, certain states are experiencing huge surge in daily covid positive cases. Finance minister Nirmala Sitharaman seemed confident that government will be addressing pandemic concerns and inoculation will be intensified in the months to come. “There is also this planning of ramping up the vaccine being given, both from the supply and also the execution point of view” she stated.
Nirmala Sitharaman also optimistically indicated that pharmaceutical sector in India has expanded during the pandemic and has seen huge surge in profits due to India’s ambitious plan to supply vaccines around the world. She stated that, “thanks to the way this country over the decades placed emphasis on development in vaccines, the pharma sector and so on, today we are in a very comfortable position as regards vaccine supply, not one, not two probably even more.”
As reported, various international agencies had improved their ratings for India, IMF had predicted India to be the only country to record a double-digit growth in the coming fiscal, while Moody’s predicted India’s economy to grow by a significant 12.6%. Additionally, the Indian authorities themselves, projected Indian economy to grow by a significant 10%. This is bound to have a positive effect on the investor’s confidence in India which financial minister states will lead to economic resurgence.
S&P earlier this month predicted that many economies around the world will be vulnerable due to US’s $1.9 trillion stimulus package that could initiate capital flight from the vulnerable counties. According to S&P India and Philippines were included on the loss of vulnerable nations.
S&P had thus reportedly referred to the possible repeat of the 2013 taper tantrum, where India had to increase interest rates to prevent capital flight after US bond yields had sored around the time.
Nirmala Sitharaman commenting on this maintained that, “I don’t think that India faces the risk of repeating the taper tantrum now”. She added that, “we are carefully monitoring the situation, and taking every such step, small, immediate, to make sure that the path is fairly clear for the stimulus to work and the revival to happen.”
Earlier this month when questioned by paparazzi about the privatization spree of India, Nirmala Sitharaman had stated that it was being done to ensure that the troubled banks stayed afloat and that she had the responsibility of keeping the citizens’ money safe. In her Economic Times interview she allayed the fears of job cuts and closure of public sector enterprises (PSEs) saying that this was done to ensure efficiency and accountability.
Stating RBI bulletin, Sitharaman stated that the service sector in India is facing recovery. She maintained that “with the bulletin that has come out , we are assured that even the service sector and its revival is distinctly felt.”