Kerala Kaumudi Online
Tuesday, 18 May 2021 5.27 PM IST

Indian Economy flexes its muscles


It gives us immense relief to see that even though the world economy has been sagging since the advent of Covid, India, surprising many economists, has been able to come back with a bang. When several nations are facing a second lock-down, the situation in India is no different. Right in the wake of economists predicting that the lock-down and the migrant workers exodus will plunge India into an economic disaster, India has risen from a financial year of lock-down to a path of economic revitalization.

From March 2020 to March 2021 almost every economic field was laid bare including production-construction-farming sectors. Still, when the lock-down was relieved in the second lap of the economic year, these sectors showed clear signs of revival and the production-distribution process began to work like a well-oiled machine. Highly desirable results of this revival could be seen everywhere as never before. The fact that such a progressive phase was against all kinds of predictions shows the inherent strength of Indian economy.

World economic observers such as Moody’s and Fitch rating have asserted that in the post covid times the Indian economy is on the path of come back. According to the new finding by Moody’s India will attain 12 percent economic growth in the financial year of 2022. India already has a foreign currency deposit of 60,000 crores. Apart from foreign investment in dollars, borrowing in dollars also adds to dollar inflow.

At the end of the financial year (2021 March) when dollar value rose up in the world economy,

all Asian currencies suffered a setback while Indian currency alone bettered its position. Indian economy was strengthened when foreign investment firms bought huge amounts of shares from the Indian share market. Apart from foreign investment, when Indian companies borrow in dollars, that too adds to our dollar procurement. In March 2021 alone Indian companies have borrowed 100 crores in dollars from abroad. All these strengthen the economic base of India.

UTI mutual fund CEO Sur Imthaya Sur Rahman is of the opinion that post- Covid, India will become one of the fastest growing nations. He points out that from February 2016 to February 2021 India has had an economic growth of 156 percent. Even as the pandemic is hitting India harder and harder, the basic factors that affect investments and other allied activities remain the same, says M Damodaran, the chairman of Excellent Enablers and ex-chairman of SEBI, UTI and IDBI.

One of the reasons for this acceleration in growth is how India began to use digital technology widely for economic exchanges in times of Covid. When so much time was saved and the speed at which money transfer happened gave a great fillip to the economy, especially in e-commerce.

In India digital monetary exchanges are so well developed that even the developed countries are amazed by its popularity. In the coming years India is predicted to be at the forefront of nations that use digital technology widely in economic activities. Mr. Dinesh Vara, the SBI chairman assures that about 70% of transactions at the SBI, the largest public sector bank in India happens online.

Economists assess that China is progressing so fast that it is overtaking the US on several grounds. Furthermore, they predict that India will overtake even China within no time. So, let’s hope that the sources of economic strength will be further energized even in the midst of the second Covid wave.

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