Indian economy heading towards V-shaped recovery, says Assocham

India’s economy is showing decisive signs of a ‘V-shaped’ recovery in 2021 with the return of consumer confidence, robust financial markets, an uptick in manufacturing, and exporters braving it out in the global market with never-say-die spirit, Assocham said on Sunday. 

The industry chamber said it expected immense accruals of economic benefits from the Covid-19 vaccination programme about to be rolled out. 

“The high-frequency data is a strong pointer to a V-shaped recovery in 2021 with the seeds bursting into green shoots over the last two months of 2020 itself,” Assocham Secretary General Deepak Sood said.  

India’s GDP is estimated to contract by a record 7.7 per cent during 2020-21 as the Covid-19 pandemic severely hit the key manufacturing and services segments, as per government projections released on Thursday. According to Assocham, the most definitive of the data is the record collection of Rs 1.15 trillion in the Goods and Services Tax (GST) during December. 

“The state-wise collection showed the fightback spirit in consumer confidence. Illustratively, the largest consumption state of Maharashtra, which was amongst the severely affected by the Covid-19 pandemic, has posted a healthy growth of seven per cent in GST collection; even as the total GST mop-up was up 12 per cent year-on-year,” Sood said. 

He said the Budget for 2021-22 would be a major catalyst. “Great focus on health care, agriculture and revival of demand would be imperatives in Finance Minister Nirmala Sitharaman’s Budget”.