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Business activity in India has surpassed Pre-Pandemic performance

TFI Desk by TFI Desk
1 September 2021
in Economy1
business activities india
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According to a report by Nomura, the business activities in the country have surpassed the pre-pandemic levels. Nomura India Business Resumption Index was at 102.7 for the week ending on August 29 from 101.3 in the prior week.

This shows that the Indian economy has recovered from the devastating effects of the Coronavirus, and is all set for growth in the coming weeks and months. The GDP data for the first quarter of the ongoing fiscal year recorded 20.1 per cent growth (although on a low base) despite the effects of the second wave lockdowns.

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“GDP at Constant (2011-12) Prices in Q1 of 2021-22 is estimated at Rs 32.38 lakh crore, as against Rs 26.95 lakh crore in Q1 of 2020-21, showing a growth of 20.1 per cent as compared to contraction of 24.4% in Q1 2020-21. Quarterly GVA at Basic Price at Constant (2011-12) Prices for Q1 of 2021-22 is estimated at Rs 30.48 lakh crore, as against Rs 25.66 lakh crore in Q1 of 2020-21, showing a growth of 18.8%,” said Ministry of Statistics & Programme Implementation in a statement.

In the second quarter (July-September), the growth is expected to be much higher thanks to further opening up of the country and revival in business activities.

Throughout the pandemic, the Modi government managed the situation very well and used this opportunity to push for structural reforms on agriculture, labor, and capital. Also, instead of falling for the demand-side fallacy and putting money in the hands of the people, the government used the fiscal resources for capital expenditure to ensure that a virtuous cycle builds.

As soon as the pandemic hit the Indian shores, the government forced an immediate lockdown, and Prime Minister Narendra Modi went into overdrive and announced a massive 20 lakh crore package, roughly 10 per cent of India’s Gross Domestic Product (GDP) to give immediate relief against the slowdown induced by the Pandemic and the related lockdowns.

Out of the 20 lakh crore rupees package, 8.04 lakh crore rupees have already been injected into the system in the form of additional liquidity through various means across February, March, and April. Add to it, the 1.7 lakh crore rupees relief package that Union Finance Minister Nirmala Sitharaman had announced on March 27, shortly after the imposition of a nationwide lockdown.

Amid the pandemic, India carved out a new strategy for growth and named it ‘Aatmanirbhar Bharat’. Under the Aatmanirbhar Bharat campaign, the Modi government is pushing towards privatization, liberalization, and promotion of Indian firms and local businesses. The government made it very clear that public sector companies will exist only in strategic sectors, that too in not more than four or five sectors.

Moreover, foreign companies will be treated in the same manner as they treat Indian companies, and countries like China will not be allowed to have a huge trade surplus. Therefore, the huge amount of foreign reserves which used to go outside the country will now be accumulated and invested in boosting and improving the infrastructure of the nation.

The latest GDP figures and revival of the business activities in India above the pre-pandemic level is a vindication of the efforts and strategy of the Modi government and hopefully, it will put the country on a multi-year double-digit growth trajectory.

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