The new Omicron variant of COVID-19 may pose a fresh risk to the ongoing global recovery. However, preliminary evidence suggests the Omicron variant is expected to be less severe in India with the increasing pace of vaccination, said the Finance Ministry in its Monthly Economic Report for November 2021.
India's economic recovery is expected to gain strength in the remaining quarters of the financial year on the back of upbeat market sentiments, rapid vaccination coverage, strong external demand, and continuous policy support by the Reserve Bank of India (RBI) and the government, according to the report.
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The country's real gross domestic product (GDP) in the second quarter of the current fiscal grew by 8.4 per cent year-on-year, recovering more than 100 per cent of the pre-pandemic output in the corresponding quarter of the financial year 2019-20. India has not only caught up with its pre-pandemic output of the second quarter but is also expected to do so for the whole year, according to the finance ministry's report.
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India is also among the few countries that recorded four consecutive quarters of growth (third and fourth quarter of 2020-21 and first and second quarter of 2021-22) amid the pandemic. The recovery was driven by a revival in services, full recovery in manufacturing, and sustained growth in the agriculture sector.
On the demand side, exports and investment constituted the macro drivers rising by 17 per cent and 1.5 per cent respectively over their pre-pandemic levels. Recovery in private consumption also jumped from 88 per cent in the first quarter to 96 per cent in the second quarter - becoming an emerging macro growth driver.
On the supply side, while the real gross value added (GVA) in agriculture continued to be higher than its pre-pandemic level, the manufacturing and construction sectors also surpassed their pre-pandemic levels to emerge as key drivers of growth.
Meanwhile, Delhi logged its second case of Omicron today as a traveller who returned from Zimbabwe tested positive. With the latest case, India has so far registered 33 cases of the new variant that has sparked fresh worry worldwide.
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