With contraction in the Gross Domestic Product (GDP) almost certain in this financial year, Niti Aayog vice chairman Rajiv Kumar estimates that it will take end of 2021-22 fiscal for India’s economic growth to likely reach pre-Covid-19 levels.
The Reserve Bank of India (RBI) has also revised its forecast of economic growth for the current fiscal year (2020-21) to (-)7.5% as against its earlier forecast of (-)9.5%.
When asked about growth projection for the next financial year, Kumar told news agency PTI on Sunday (December 6), “We should reach pre-Covid-19 levels at the end of fiscal year 2021-22 for sure.”
He added that the GDP contraction this fiscal is expected at less than 8%.
India’s economy recovered faster than expected in the September quarter as a pick-up in manufacturing helped GDP clock a lower contraction of 7.5% and held out hopes for further improvement on better consumer demand.
Replying to a question on asset monetisation, he said this is ongoing work and it has received attention at the highest level. “We will continue to pursue this and make sure that the targets of asset monetisation are reached,” Kumar stressed.
According to PTI, the government is looking to raise ₹ 2.10 lakh crore through disinvestment in the current fiscal. This includes ₹ 1.20 lakh crore from Central Public Sector Enterprise (CPSE) stake sale and ₹ 90,000 crore from sale of government stake in financial institutions.
Talking about banking reforms, he said the sector needs further expansion and an increase in competition because India’s private debt to GDP ratio remains limit to mid 50s.
Stating that in case of other emerging economy, private debt to GDP ratio is well beyond 100%, Kumar said that “so we need to increase private debt and this will happen when our banking sector will expand”.
On the Indian agriculture sector, he said the Niti Aayog now is very strongly pushing the programmes for chemical free natural farming which has a potential to reduce cost for agriculture production dramatically and also has very positive impact on the environment.
Kumar said the expansion of natural farming all over the country will make Indian agriculture more competitive and it also promises to have a significant positive impact on farmers’ income.
(With inputs from PTI)