Former NITI Aayog vice-chairman Arvind Panagariya said the Indian economy has recovered “to a great extent” from the disruptions caused by the pandemic. Along with this, he expressed hope that this improvement will continue and the growth rate of 7-8 percent will be restored again. Panagariya suggested that the government should now indicate its intention to reduce the fiscal deficit from half to one per cent in 2022-23. Economist Arvind Panagariya said in an interview to PTI, “The Indian economy has improved well to return to pre-COVID GDP levels… only private consumption is still below its pre-Covid-19 levels.”
When the Ministry of Statistics and Program Implementation has projected India’s GDP growth rate at 9.2 per cent in 2021-22, Panagariya said that ‘this figure is higher than any other country and the revival has taken place across the country’. Explain that the Indian economy had declined by 7.3 percent during the last financial year.
Panagariya said that epidemic experts believe that due to vaccination and different types of corona virus, there are antibodies in a large section of the population, there is a high probability that the epidemic is in its final stages. “If this really happens, I am hopeful that the recovery will continue and 7 to 8 per cent growth will be restored,” Panagariya said.
Panagariya, currently professor of economics at Columbia University, said the government should now focus on reducing the fiscal deficit, as failing to do so would create a huge debt burden for the next generation.
Due to the COVID-19 pandemic, the fiscal deficit had increased to 9.5 per cent in the first pandemic year 2020-21. The government aims to bring down the fiscal deficit to 6.8 percent of gross domestic product (GDP) in the current financial year (2021-22).