India will be the fastest growing economy in 2021, will get base effect and benefit of government policies
The damage that India’s economy has suffered in 2020 can recover dramatically in 2021 and become the world’s fastest-growing economy. India’s economic growth rate next year could be the fastest among the world’s major economies, including European countries, developed countries and emerging markets. The biggest reason for the possibility of a sharp jump in the country’s economic growth rate is being attributed to the base effect, but other major reasons include measures taken by the Modi government.
Pre-orders of 160 million doses including Oxford/AstraZeneca vaccine have been placed
India’s economic growth rate in the first quarter of the current financial year was 23.9% in the negative, but in the next quarter, it improved to 7.5% in the negative with a significant improvement. Due to this, the expectations of accelerating India’s economic growth rate have increased in the coming quarters. Many rating agencies have increased their estimate of the growth rate of the Indian economy one by one several times. Fitch Ratings wrote in its recent report that India’s future is bright, given the possibility of several Covid-19 vaccines coming in 2021. The central government has placed a total of 160 million doses of pre-orders, including 50 million doses of the Oxford/AstraZeneca vaccine.
Vaccination distribution will remove the restrictions of social distancing soon, sentiment will be better
The rating agency has also predicted restrictions on social distancing from vaccine distribution to be faster than expected and sentiment will be better. India, which once achieved the highest economic growth rate in the world, came second after China in terms of economic growth due to the recession, long before the outbreak of Coronavirus.
Growth rate to be around 10%, highest in the world’s big economy
India’s economic growth rate has been steadily decreasing from 8.2% in the last March quarter of FY 2018 to 23.9% in the first quarter of the fiscal year 2021, from zero in the June quarter. In the midst of all this, India’s economic growth rate was 0.1% in the last quarter of FY 2019. The measures taken by the government to strengthen the economy with a favorable base effect can lead to an economic growth rate of about 10% in the new fiscal year, which will be the highest among all major economies of the world.
Production, employment generation priority, government’s focus on long term growth
Meanwhile, Moody’s has raised its economic growth forecast for the next financial year from 10.6% to 10.8%. Moody’s says it has increased its estimates on the government’s focus on production and employment generation as a priority and long-term growth as part of recent relief measures. The rating agency said that the government’s recent measures are aimed at investment in infrastructure, availability of loans and generating employment as well as enhancing the competitiveness of the domestic manufacturing sector by boosting the troubled sector.
