INSUBCONTINENT EXCLUSIVE:
India's manufacturing and services activity took a heavy knock in quarter started AprilIndia's top economic adviser said a V-shaped recovery
for the economy is possible this year, provided a vaccine is found to contain the Covid-19 pandemic. "The recovery will happen after that
uncertainty from the health side is taken care of," Krishnamurthy Subramanian, the chief economic adviser to the finance minister, said in
an interview with Haslinda Amin at the Bloomberg Invest Global virtual conference
"If it so happens that in the latter half of the year we have the vaccine, then one can anticipate V-shape recovery starting in the second
half."In the absence of a vaccine, the economic recovery will have to wait until next year, although that too is likely to be V-shaped given
the experience after the Spanish flu of 1918, he said.With a coronavirus vaccine still months or may be even years away, economists outside
the government don't see a sustained recovery anytime soon."We expect the economy to recover in the next fiscal year to 8.5 per cent, which
is largely due to base effect," Dharmakirti Joshi, chief economist at Crisil Ltd., said
"Vaccine is not coming this year
Our assumption is it will only be available in mid of 2021."India's manufacturing and services activity took a heavy knock in the quarter
started April owing to a nationwide lockdown to stem the coronavirus pandemic
That's put Asia's third-largest economy on course for its first annual contraction in more than four decades this year, with some economists
seeing a return to 8 per cent-plus growth rates taking as long as a decade.But Mr Subramanian is confident that support measures unveiled by
the government, in addition to a low-base effect, will help lift economic growth next year.What Bloomberg's Economists Say"The extended
lockdown, cratering production, still-rising Covid-19 cases, inadequate fiscal policy support and limited space for further conventional
monetary easing mean the recession will be more pronounced than anticipated and a V-shaped recovery out of reach."-- Abhishek Gupta, India
economistIndia's government unveiled a Rs 21 lakh crore ($276 billion) package to support the economy, including easing access to credit for
small businesses and offering cheap loans to workers and farmers."Because of the measures we have taken on productivity, we do anticipate
growth to be back actually to the high level of 7 per cent and 8 per cent for sure," Mr Subramanian said.(Except for the headline, this
story has not been edited by TheIndianSubcontinent staff and is published from a syndicated feed.)
