Wishful V-shape
Worse, a vaccine riding to our rescue by early 2021 is still a hope rather than a done deal and coronavirus cases still seem to be spiralling up too fast to permit a return to normalcy
The finance ministry expects India’s nominal gross domestic product (GDP) to grow 19% in 2021-22. Even if half this figure is inflation, it would require a nearly double-digit expansion of national output, or a perfect V-shaped recovery from this year’s likely double-digit rate of contraction. On a shrunken base of GDP, an economic snap- back could spell big numbers. But it’s far from clear if we can assume such a sharp revival.
A reality check suggests that the economy is headed for prolonged pain, given the blows that overall supply and demand have taken after covid laid siege to India. Credit-led rescues have their limits and fiscal aid has been both patchy and late. Worse, a vaccine riding to our rescue by early 2021 is still a hope rather than a done deal and coronavirus cases still seem to be spiralling up too fast to permit a return to normalcy. While statements of optimism do have their value in talking sentiment up, especially at a time we can hardly afford to surrender our collective will to corona complacency, India’s policy planners would be well advised to resist taking a quick bounce-back for granted. Emerging stronger demands realism, ideas and hard work.
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