Slow pace of improvement in many important sectors including 8 major industries due to Corona: Report
The Finance Ministry has warned in its latest Monthly Economic Review report on the economy that the pace of reforms is slowing down in many important sectors, including eight major industries. The challenges in front of the Prime Minister, who is struggling to improve the image of his government, are getting bigger on the economic front. This Monthly Economic Review (June 2021) report of the Finance Ministry, released just two days after the expansion and reorganization of the Council of Ministers, highlights the challenges before the Modi government.
According to the report of the Ministry of Finance, there are signs of improvement in the Indian economy after the second corona wave, fast in fiscal relief, monetary policies and vaccination campaign, but according to the Monthly Economic Review Report (June 2021), the process of economic recovery in the country remains uneven. is. The process of improving port traffic, air traffic, PMI manufacturing and services is slowing down. The growth rate of India’s eight major industries was recorded at 16.8 percent in May 2021, which is 8 percent less than the pre-covid level of May, 2019. Uncertainty remains on the improvement in global demand and prices of essential commodities. It is very important to speed up the process of vaccination to avoid the third wave of corona.
According to the Principal Economist of India Ratings and Research, the country’s leading rating agency, due to these economic challenges, the estimated growth rate of GDP will be greatly affected.
Sunil Sinha, Principal Economist, India Ratings and Research, told NDTV, “We estimate that the GDP growth rate may fall to 9.6% from the earlier estimated 10.1% if the Indian government vaccinates all its 18+ citizens by the end of this year. If the process of vaccination is completed by March 2022, then the growth rate is expected to fall further to 9.1%. Also, during the second corona wave in April-May, the government’s revenue earnings have also decreased due to the lockdown in economically important states. In June 2021, the GST collection has fallen to ₹ 92,849 crore.
Anger is increasing over the unexpected increase in the prices of petrol and diesel in the country. The price of petrol has exceeded Rs 100 per liter in 12 states of the country. Meanwhile, the global rating agency FITCH has reduced the growth rate of Indian GDP to 10% for 2021-22 from 12.8% earlier estimated, citing slowdown in the economic recovery process due to the lockdown during the second corona wave.
In the struggle to improve the image of his government, the challenge in front of Prime Minister Modi is getting bigger on the economic front. Obviously, to bring the economy weakened by the effect of the second Corona wave back on track, they will have to focus on tackling the challenges on the economic front, controlling the prices of petrol and diesel as well as intensifying the vaccination campaign.
S&P: India’s projected growth rate slows