Indian economy will reach pre-Covid levels by December, says Sanjeev Sanyal

We saw 20.1 per cent, year on year GDP growth in the quarter of April to June. Now of course it is a very strong number, but no doubt it has been. It is based on a lower base, and there is a base effect because, in the same period in 2020, we were under lockdown, says Sanjeev Sanyal, Principal Economic Advisor to the Ministry of Finance.

New Delhi:Sanjeev Sanyal, Principal Economic Advisor to the Ministry of Finance, on Friday said that the Indian economy would reach pre-Covid levels by the third quarter of October to December this year. His remarks came as the government data released on August 31 showed that India's GDP grew by 20.1 per cent in the April to June quarter (Q1 FY22) as compared to the contraction of 24.4 per cent in Q1 FY21.

Speaking to ANI, Sanyal said, "We are seeing demand coming back quite strongly, we can see that not only domestic demand but exports are doing particularly well. We have seen 45 per cent year on year growth in August in merchandise exports and services exports are doing quite well. Indian economy will reach pre-COVID-19 levels by the third quarter of October to December 2021.""Not only merchandise exports, but the foreign direct investment also continues to be at record levels so again there is momentum in the economy."

"We will be able to hit pre COVID level by the October to December quarter, assuming obviously we do not get hit very major shock from a third wave or some such thing. I think if there is no major shock, then we are on stream for having double-digit growth not just this year but even in next year, because there's a lot of momentum in the economy," he said.

Referring to the current GDP number, he said, "We saw 20.1 per cent, year on year GDP growth in the quarter of April to June. Now of course it is a very strong number, but no doubt it has been. It is based on a lower base, and there is a base effect because, in the same period in 2020, we were under lockdown. "Commenting on the rally in stock markets, the Principal Economic Advisor said he cannot comment on the stock market because that goes up and down but the capital markets are strong which is a good sign.

"It means that both domestic and foreign investors are beginning to appreciate the major reforms we have done in many years. You could not justify these levels of the capital market but for the fact that people have expectations that many of the reforms from GST, Insolvency and Bankruptcy Code, labour laws. Opening up of a whole array of sectors from, removal of restrictions on the BPO sector, the new drone policy -- all of these are creating an open, easy place to do business. And I think it is been appreciated by investors," he said.

Talking about the sectors that need to be looked after, he said that the government is concerned about the sectors which have been affected by continuous restrictions particularly travel tourism and entertainment. Responding to a question on former Finance Minister P Chidambaram against Centre's National Monetisation Pipeline (NMP), Sanyal said, "I do not wish to get into political debates about this, the economics of this is very clear. The government owns a large number of assets, if it is possible for it to monetise them and raise resources so that we can invest in new infrastructure or provide support to the vulnerable sections of the economy or society, then what is wrong with that?"

"I do not think there is too much of an economic debate at all. There are many lands in Mumbai and Kolkata that are derelict and not being used. Why should not we reuse this land and monetise them and leverage them in various to new users? So, I do not think anybody can make any meaningful economic argument against efficient use of resources, political arguments of course can carry on."

(ANI)