Accelerating vaccination coverage is essential to regain growth momentum: Ministry of Finance report
“As we cautiously recover from the second wave, rapidly improving vaccination delivery and anticipating planned fiscal measures in the Union budget they are key to invigorate the investment cycle in the coming quarters, “he said.
Regarding the impact of the second wave of Covid, the report said that since lockdown restrictions at the state level are more tailored to first wave learnings, manufacturing and construction are expected to experience a milder economic shock in the current quarter.
The report emphasized that accelerating the pace and coverage of vaccination is critical to helping India recover and regain the momentum of the economic recovery.
Continuous surveillance in terms of pandemic preparedness, increased spending on health and health infrastructure, faster implementation of vaccines and vaccination, investment in research and development to protect against possible mutants of the virus, prudent and preventive restrictions, and strict compliance with the Covid standards. Behavior is essential to maintaining the delicate balance of lives and livelihoods, he said.
The situation of the second wave of Covid in India has improved lately with a continuous decrease in the average of 7 days of active cases since May 13, 2021. The data showed that the second wave reached its peak of average 7 days of New cases daily around May 8, with the rate of decline as fast as the increase.
The daily rate of positive cases has plummeted from 24.9 percent in early May to 3.6 percent on June 2.
Concomitantly, the report said that high-frequency indicators in the real and financial sectors such as energy consumption, e-way bills and foreign portfolio investment flows experienced a slight rebound in the second half of May 2021 after to withstand the second wave-driven contraction during April and the first. fortnight of May.
The report also noted that the country witnessed a V-shaped economic recovery in the second half of 2020-21.
According to the report, India is one of the few selected economies that has experienced positive year-on-year (year-on-year) growth in the last two consecutive quarters.
India’s real GDP is estimated to have grown by 0.5 percent in the third quarter and 1.6 percent in the fourth quarter of fiscal 2020-21, leading to an upward revision in the growth of the Annual real GDP from (-) 8 percent (2nd lead forecast) to (-) 7.3 percent in fiscal 2020-21, it said.
With a strong policy focus on infrastructure and construction spending in the second half of fiscal year 2020-21, the ratio of gross fixed capital formation (GFCF) to GDP reached 34.3%, one of the highest in more than twenty-six quarters.