Although economic recovery India has picked up momentum, this does not mean that the recession is over. It has only been a slowdown at the beginning while the winds have changed direction. It is the time to think about the future with optimism as this will lead to a better performance. With the right planning and implementation, the economic prospects are certainly brighter and more promising than they were in the past.
The first quarter of 2021 was a good showing by the economy with a gross domestic product (GDP) growing by 4.9 percent annual, far ahead of the expected 3 percent. This was the first indication of change and the signals are getting clearer. In spite of the slowing down in the infrastructure development, there is a strong rate of inflation that is being sustained because of the high level of unemployment. This is also adding fuel to the fire and accelerating the process of fiscal consolidation, which will reduce the burden on the fiscal policy.
The second quarter of 2021 saw another encouraging sign of economic recovery in India. Consumer price indices (CPI) increased by just three percent annual, far lower than the rise of six percent in the previous year. This indicates that though the economy is contracting, the consumers have taken some respite and there is scope for some improvement. Acknowledging the fact, finance ministers of different countries are sending officials from their respective countries to India to understand the prevailing situation and share their ideas on how to move forward.
With the new interest rates, the economy can ill afford to lose further ground and fall deeper into recession. Although the fall in the gross domestic product (GDP) is slower than the previous two quarters, it is still stalling and the officials need time to analyze the real picture. The official economic survey has projected GDP growth of six percent in the first economic quarter of 2021, but this was below the six percent projection made by the economists. With the inflation rate touching the twenty percent mark, the government is taking stock of the situation and looking for suitable measures to counter the increasing inflationary pressures.
The Indian economy has taken time to rebound after the global financial meltdown. However, the impact has been limited in its reach and impact on the economy. The slowdown in the economy had led to lower output and investment and the resultant situation is said to be concerning the overall strength of the economy. Even with this, the government has remained firm in keeping the growth rate within the accepted limits. Economic recovery India remains on the boil as authorities scramble to contain the raging inflation rate.
There are mixed feelings in the minds of the Indians regarding the . . . . . . prospects of recovery. The manufacturing sector is in a tizzy and is reported to be poised for a pick up if the current trends continue. The over all picture however remains positive with industrial growth set to pick up and the currency strengthening at a steady pace. The only concern is that it will take some time for the upturn to materialize and the investors need to be patient enough to wait out for the right time to strike the right deal. The better part of it is that the current upturn is being driven by domestic factors and so, it won't be until the situation changes in the global arena that we can actually say that India is back on the road to recovery.