Indian economy fundamentals strong, Panagriya says – News Today

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Arvind Panagariya

New Delhi: Indian economic fundamentals are strong as fiscal year 21 Q3 and Q4 real GDP has already surpassed pre-pandemic level, former vice president of Niti Aayog said on Sunday , Arvind Panagariya.

Panagariya, however, also stressed that the country must conquer Covid-19 as quickly and decisively as possible. The news on the vaccination front here is excellent. I only wish that as citizens we would do our part and religiously wear masks when we come into contact with others, he said.

By the third and fourth quarters of 2020-2021, real GDP had already surpassed the pre-Covid-19 level … these facts tell me that the fundamentals of the economy are strong, he said.

Meanwhile, the Indian economy grew at a record 20.1% in the April-June quarter of this fiscal year, helped by a very weak base last year and a strong rebound in manufacturing and services despite a devastating second wave of Covid-19. .

The Reserve Bank of India (RBI) has lowered the country’s growth projection for the current fiscal year to 9.5%, from 10.5% previously estimated, while the World Bank has forecast growth in the Indian economy by 8.3% in 2021.

Panagariya, professor of economics at Columbia University pointed out that contrary to the general impression, private investment in India has certainly already picked up. In the third and fourth quarters of fiscal 21, gross fixed capital formation (GFCF) at 33% and 34.3% of GDP, respectively, was higher than in the corresponding quarters (before Covid-19) a year earlier, he said.

When asked about foreign capital inflows, he said it was clear that they are not just the result of quantitative easing (QE). Certainly, QE encourages capital to leave advanced economies, but that does not guarantee that it will come to India and not other emerging market economies, he said, adding that he chooses India. because of the high returns that the Indian economy promises.

Regarding the stock market boom, he said, given the high potential of the Indian economy, what we are seeing in terms of high stock prices may well be a rational response from equity investors.

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