The government's top economic advisers say that an ''economic recovery is underway''. Chief economic advisor KV Subramanian expects GDP growth to stablise at 6.5% to 7% next fiscal. Bibek Debroy, Chairman of the Prime Minister's Economic Advisory Council (PMEAC) says a potential third wave will not be as devastating as the second wave and lockdowns will remain localised.

“We saw a V-shaped recovery in the macro eco after the near 25% decline in Q1 when in my media interactions I had mentioned there is a V-Shaped recovery that was on. It's heartening to see that has transpired at the macro eco level with the Q2 growth being much lower at 7.5 percent with Q3 and Q4 recording positive growth. So India being among one of those few countries to have consecutive quarters of positive growth during the pandemic,” said Subramanian.

According to Subramanian, while the second wave was quite devastating on the health side, the economic impact of that has been limited primarily because the second wave was much shorter in duration and secondly, restrictions were primarily at the state level. “We anticipate from FY23 onwards, growth to start being 6.5 percent to around 7 percent and then accelerating further,” he said.

“Regardless of the intensity of infections during the third wave, fatalities during the third wave are not going to be as high as those in the second. The reason for that is primarily vaccinations. Unlike the lockdown last year which was Union government determined, the lockdown now is decentralised, so the impact of the lockdown is not going to be as serious, ‘ said Debroy.

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(Edited by : Aditi Gautam)

First Published:Jul 16, 2021 6:44 PM IST