Page 135 - Abhivruddhi

The Economist: “India’s economy is
suffering from long covid”; https://
Overseas
Media www.economist.com/asia/2021/07/18/ July 2021
indias-economy-is-suffering-from-
long-covid

The themes that emerged from the review of media coverage are
discussed in the following paragraphs.
Government sources have acknowledged that India is 18-24 months
behind schedule in its five trillion goal due to the impact of the pandemic,
and is likely to become a five trillion-dollar economy by 2027. The
positives are: strong banking system, forex reserves, FDI, rising export
earnings and disinvestment.
The IMF has opined that India will be a four trillion-dollar economy
by 2025. This is in line with the Indian government’s predictions. The
IMF representative has listed the following factors as positives for India:
young population, large labour force, rising educational attainment and
revenue mobilisation through disinvestment. However, she cautions that
this should be supported by additional spending on health and financial
support to the most vulnerable groups of the population. IMF further
suggests that regulatory policies should support economic growth, such as
allowing the exit of non-viable firms and encouraging banks to continue
building capital buffers and recognizing problem loans.
International Consultancy firm EY in its report predicts that India will
achieve the target of becoming a five trillion-dollar economy by 2028. It
further quotes IMF data of real GDP growth rate of economies to state
that India’s growth rate at 8.5% in 2022 will overtake China’s at 5.6%. EY
cites two factors in India’s favour – fiscal deficit at its lowest in past two
decades and Covid-19 vaccination rate. 95% of India’s population has
received the first dose and 74% are fully vaccinated (Economic Times,
27th January 2022). This, EY avers, will bolster economic recovery in the
pandemic era. EY further suggests a disinvestment target of INR 1.75
lakh-crores to stimulate economic growth.
Financial portal www.moneycontrol.com evaluates the role of Union
Budget 2022 in facilitating journey towards five-trillion economy. It
broadly addresses three key sectors: manufacturing, infrastructure and
logistics. It believes the government’s capex infusion of INR 7.5 lakh-
crore in FY22-23 will have a multiplier effect on investment activities in
the overall manufacturing sector. The other factor is PLI schemes in 15

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