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Indian Economy Quickly Recovers from COVID-19 Pandemic
Indian economy

With a horrifying year belonging to the COVID-19 pandemic behind them, several companies in India are anticipating that the Union Budget of 2021 will help bring in a fresh wave of the investment cycle. It was brutally hit by the pandemic of 2020. This year the companies sincerely wish the government to extend more sops, concessions, incentives, and reliefs. The government’s multi-billion-dollar package will indeed be of great help in economic revival of India.

The Union Government and the Reserve Bank of India (RBI) did take several corrective steps like the debt moratorium scheme to alleviate the stress of the companies. The government tried its best on every front to counter the pandemic induced crisis. The RBI cut interest rates a number of times – lowest in 9 years – since the beginning of the crisis. It did not change its repo rate in December due to inflation concerns.

However, a section of the Industry is of the view that such investments like the bullet train, a new Parliament building, etc. during this period were unnecessary.

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Apart from the difficulties, the Industry also learned some lessons from the crisis. It feels that similar or worse events could happen anytime hereinafter and so the companies must stay on guard.

India Inc hopes that India will succeed in its vaccination drive. The economy may then show healthy growth charts in the coming months after the Budget. The chief factors being rising consumer spends and a visible turnaround in rural India. This can also be viewed against the backdrop of appreciable rise in sale of tractors and commercial vehicles. Rural India was resilient through the worst of the pandemic. Rural Indian economy grew even as the rest of the economy did not. After all, food demand and supply, the fundamental ingredient for survival, never fell. The lockdowns and restrictions severely reduced consumer demand on every consumable item except the most essential goods and services.

As India begins its vaccination act from January 2021, the companies are likely to start investing more given the fact that their most of their employees will return to work.

Visible signs of Indian economy revival

  • An unabated performance of the stock markets. The Sensex is presently at 47,868. Nifty is at on an all time high of 14018.
  • Goods and Services tax (GST) collections crossed a record high of Rs 1.15 trillion in December. For three successive months, GST collections have been more than Rs 1 trillion.
  • The rupee is trading below Rs 76 to the dollar. Analysts predict that it will stay so by the end of 2021.
  • Atmanirbhar Bharat (self-reliance) schemes being executed – a huge positive – a step in the correct direction
  • 351 kms of Dedicated Freight Corridor came alive
  • A new Communication satellite launched
  • The grand show, the IPL, held successfully
  • Overall greater household spending and more brisk business activity than during COVID-19 pandemic-induced lockdowns.

Such signs have been triggering hopes that the economy may have finally left the worst behind. It is indeed a signal of a sustained recovery in the broader economy. These are extremely encouraging signs and would go a long way to help Indian economy to grow further. One can easily spot the onset of an economic recovery in real terms.

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By Kasturi Garg

Prior to her current job she was licensing Slinkies in Delhi. Earned praise for building jack-in-the-boxes in the financial sector. When she is not writing in her favorite coffee shop in Delhi, Garg spends most of her time reading, cooking, and traveling which is presently restricted due to the pandemic. She watches Khan's movies and likes to catch up with her favorite KBC shows. An admitted food fanatic, she feeds her addiction to dosas and idlis by going to Bengali Market in Delhi on Sunday afternoons.

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