Prepare for greater uncertainty: Niti Aayog vice-chairman
Consumer as well as investor sentiments likely to be hit as the situation has turned far more difficult
New Delhi: The country needs to prepare for “greater uncertainty” in terms of the consumer as well as investor sentiments due to the second wave of coronavirus infections, and the government will respond with fiscal measures as and when required, Niti Aayog Vice Chairman Rajiv Kumar said on Sunday.
While acknowledging that the present situation has become far more difficult than it was in the past due to rising coronavirus infections, Kumar remained hopeful that the country’s economy will grow 11 percent in the current fiscal ending March 31, 2022.
India is grappling with the spiraling number of Covid cases as well as related deaths, forcing many state governments to put in place restrictions on the movement of people.
According to Kumar, India was on the verge of defeating Covid completely but some new strains from the UK and other countries have made the situation far more difficult this time around.
“Apart from their direct impact on some sectors like the services sector, the second wave will increase the uncertainty in the economic environment which can have wider indirect effects on economic activities. So, we need to prepare for greater uncertainty, both in consumer and investor sentiments,” Kumar said.
To a query on whether the government is considering coming up with a fresh stimulus, the Niti Aayog vice-chairman said this question has to be answered after the finance ministry analyses both the direct and indirect impact of the second COVID wave.
Earlier this month, the Reserve Bank left the benchmark interest rate unchanged at 4 per cent but maintained an accommodative stance to boost the economy.
Regarding growth in the current financial year, Kumar said that various estimates suggest that it will be around 11 percent.
In its last policy review, the RBI projected growth of 10.5 percent for FY’22 while the Economic Survey, tabled in Parliament earlier this year, estimated 11 per cent growth during the year.
The country’s economy is projected to contract by 8 per cent in 2020-21, as per official estimates.
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