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Green shoots of economic revival have emerged: Finance Ministry report
Jul-07-2020

The Finance Ministry’s Economic Affairs Department in its latest Macroeconomic Report for June said that early green shoots of economic revival have emerged in May and June with real activity indicators like electricity and fuel consumption, inter and intra-state movement of goods, retail financial transactions witnessing pick up. It also said economy will grow further on the back of a conducive policy environment, nudging the coronavirus-hit economy to move on the path of recovery and growth.

As per the report, India’s forex reserves at $505.6 billion as on June 19 continue to provide a crucial cushion to external shocks on the back of higher FDI, portfolio flows and low oil prices. It noted that this recovery is also evident in the Goods & Services Tax (GST) collections for June 2020 that clocked Rs 90,917 crore at gross levels, 46% higher than May and 181% over April. It said policy environment was made conducive beginning March 2020 when the RBI and government were able to correctly anticipate the economic downturn following the outbreak of the pandemic.

The report said the stimulus package, which is a set of reforms providing continuity to the initiative that commenced in 2014, has accelerated the reforms at a time when the pandemic has constrained the fiscal envelope of the government and dampened the inclination of the people to spend, in view of economic uncertainty. The commitment of the government towards both structural reforms and supportive social welfare measures will help build on these ‘green shoots’.

It said ‘economic growth of pre-COVID times, as and when restored through fuller unlocking of the economy, will heavily lean on the reforms undertaken today to enhance its potential tomorrow’. It added that India's economic growth dipped to 4.2% in 2019-20 on account of lower growth in January-March quarter, mainly attributable to the global spread of COVID-19 since January 2020 and subsequent lockdown measures across countries including India.

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