Though the Indian economy is in recovery mode, the underlying growth impulses are weak, says economist Montek Singh Ahluwalia. The former deputy chairman of the Planning Commission says the situation calls for specific corrective action.
In an exclusive interaction with THE WEEK, Ahluwalia talked about a range of issues—from fiscal deficit to tax reforms and employment. Excerpts:
Q/What is the current state of the economy? Will the third wave of the pandemic affect recovery?
A/There is no doubt that the economy is recovering from the shock of the pandemic in 2020-21. The whole world is. The question to ask is, are we doing better than others?
The National Statistical Office has projected 9.2 per cent growth this year, based on data for the first two quarters. Signs of recovery weakened in the third quarter and independent analysts are projecting lower growth of 8.5 per cent. This will still leave us the fastest growing major economy this year, but that is only because we had the largest contraction last year. Other economies have recovered sufficiently to raise their GDP to a level higher than the pre-pandemic year of 2019-20. In our case, we will just about get back to the 2019-20 level.
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