Economy witnessing V-shaped recovery: Finance Ministry

The Indian economy is witnessing a V-shaped recovery since June with gradual reopening of economic activities, according to the Finance Ministry's latest monthly economic review.

"The sustained improvement in high frequency indicators ignite optimism of an improved performance in second half of the year," it said.

The report noted that the impending COVID-19 vaccination is set to accelerate the momentum in economic activity globally.

"The effective management of COVID-19 spread despite the festive season and onset of winter season, combined with sustained improvement in high frequency indicators and V-shaped recovery along with easing of lockdown restrictions distinguish Indian economy as one riding against the Covid-wave," noted the monthly economic review data for December by the Department of Economic Affairs (DEA).

The growth drivers have obtained the largest support from agriculture followed by manufacturing and electricity sector, it said. The agricultural sector saw a year-on-year growth of 2.9 per cent in rabi sowing, rise in tractor sales, and reservoirs' live storage at 122 per cent of decadal average. The rise in minimum support prices (MSP) along with record procurement, and accelerated wage employment generation through MGNREGS, bodes well for rural incomes and bears testimony to PMGKY's success in alleviating rural distress, it added.

"This rise in rural incomes is mirrored in the healthy, though moderated, sales in passenger vehicles, two and three wheelers and tractor, and a rebound in vehicle registrations for the first time after March 2020," it added.

India's second quarter GDP growth has turned out to be better than anticipated, falling by just 7.5 per cent against the massive contraction of 23.9 per cent in the first quarter as the coronavirus lockdown disrupted economic activity. The country's economy recovered faster than expected in the July-September quarter as a pick-up in manufacturing helped GDP clock a lower contraction. The better than expected growth was primarily due to significant rebound in the sectors like manufacturing, construction and 'trade, hotels, transport, communication & services related to broadcasting'. 

India's second quarter GDP growth has turned out to be better than anticipated, falling by just 7.5 per cent against the massive contraction of 23.9 per cent in the first quarter as the coronavirus lockdown disrupted economic activity. The country's economy recovered faster than expected in the July-September quarter as a pick-up in manufacturing helped GDP clock a lower contraction. The better than expected growth was primarily due to significant rebound in the sectors like manufacturing, construction and 'trade, hotels, transport, communication & services related to broadcasting'.

Also Read: India expects V-shaped recovery next fiscal: DEA Secretary Tarun Bajaj

Also Read: First coronavirus vaccine shots likely on January 13: Health Ministry