Economy on the path to swift recovery, says finance ministry report

Says India will inoculate entire adult population by year end

The fast-paced vaccination roll-out and enhanced mobility, currently around 90 per cent of pre-pandemic level, have placed the economy on the path to swift recovery, which gained further momentum in September, the finance ministry said on Monday.
 
The ministry said the government was able to beat its own ambitious target of 670 million vaccine doses set in June well before the onset of the festive season. So far, 930 million cumulative doses have been administered, the second highest among all countries. It added that the country will be able to vaccinate the entire adult population by the end of the current year.
 
The current rate of inoculation shows that the country is not only regaining recovery momentum but has also progressed towards attaining herd immunity.
 
“Sustained and robust growth in agriculture, sharp rebound in manufacturing and industry, resumption of services activity and buoyant revenues suggest that the economy is progressing well,” according to the Department of Economic Affairs’ Monthly Economic Review.
 
It added that strategic reforms undertaken along with new milestones in vaccination have enabled the economy to navigate the ravaging waves of the Covid- 19 pandemic. High-frequency indicators for August and September indicate broad-based recovery, as evidenced in sustained improvement in power consumption, rail freight activity, e-way bill generation, robust GST collections, and highway toll collections touching a 21-month high, sequential uptick in air freight and passenger traffic, and quantum leap in digital transactions, the report noted.

Explaining the vaccine math, the report said more than three-fourths of India’s adult population has received at least one dose while more than a fourth has been administered both doses.
 
India’s average daily inoculation rate witnessed 91 per cent increase from 4.1 million in June to 7.9 million in September, the highest after China. Citing state-wise data, the ministry said 10 states and union territories have achieved 100 per cent coverage of their respective adult populations with the first dose. However, second dose coverage remains less than 40 per cent in most states, but is expected to pickup significantly in the coming months.
 
Talking about the external sectors, it said they continue to offer bright prospects to India’s growth revival as the country’s merchandise exports crossed the $30 billion mark for the sixth consecutive month in FY22.
 
With merchandise trade deficit also rising in September, there is clear evidence that consumption and investment demand is picking up in India, the ministry said, adding that the external debt-to-GDP ratio remains comfortable, declining to 20.2 per cent at the end of June.
 
With the restoration of supply chains, improved mobi­lity, and softening food inflation, consumer price index (CPI) based inflation retreated to a four-month low of 5.3 per cent in August, demonstrating that inflationary tendencies are pandemic-induced and transitory, the ministry said.
 
However, it said, volatile prices in the international crude oil markets and upward-bound prices of edible oils and metals are concerns. Comfor­table levels of systemic liquidity and softening of inflationary pressure have also lent stability to G-Sec yields in September. The benchmark 10-year yield remained unchanged at 6.2 per cent. Trends in foreign direct investment indicate that the country remains a preferred investment destination for global investors. India attracted FDI inflows of $27.37 billion in the first four months of FY22, a 62 per cent rise over the corresponding period of FY21 ($16.92 billion).