Economy Steadily Reviving, But GDP Growth Will be Negative This Fiscal, Says Sitharaman Amid Pandemic

New Delhi: At a time when the coronavirus pandemic has affected the economy of the country because of the lockdown, Union Finance Minister Nirmala Sitharaman on Tuesday said that there are visible signs of revival in the economy but the GDP of the country wil be negavtive this fiscal. Also Read – Stimulus 4.0: Centre Likely to Announce Measures For Industries Ahead of Diwali | What to Expect

Speaking at the 4th Annual India Energy Forum by CERA Week, she said infrastructure, fintech and all employment generating and asset creating industries would be priority sectors for the government. Also Read – Sensex Sheds Over 150 Points in Early Trade; Nifty Below 11,900

Sitharaman further said recent data indicates revival in the economy, with PMI number being the highest since 2012. Also Read – ‘Unlike UP…’: Rahul Gandhi Hits Out At BJP Over ‘Gandhis Don’t Care’ Comment

“Which sort of indicates that the revival is there which is going to be steady and sustainable revival. If that sustainable revival is going to happen between quarter three and quarter four, we expect that the overall GDP growth… (is) going to be in the negative or near zero this time,” she said.

She said that globally, India is one of the lowest in terms of Corporate Taxation. “For any investment which comes into manufacturing and which commences production by 31st March 2023, they shall be paying only 15% Corporate Tax,” she added.

She further added that the Foreign Direct Investment (FDI) inflow between April and August of 2020, grew by about 13% compared to non-COVID 2019’s comparable period.

“Festival season has commenced in India, as a result of which I expect the demand to go up and therefore, be sustainable also,” she added.

India will regain the tag of the fastest growing major economy next year, she asserted.

The Indian economy had contracted by a huge 23.9 per cent in the April-June quarter, hit by the COVID-19 crisis.

Sitharaman said a “very firm lockdown” was imposed beginning March 25, with the government putting lives before livelihood to contain the coronavirus pandemic.

“We had a contraction which happened during the first quarter and post which the unlocking has been steadily happening and we can see the revival now…,” she said.

The finance minister further said indicators show that primary sector, agriculture-related segments and rural India are all doing very well.

Moreover, the RBI has projected the Indian economy contracting by 9.5 per cent in the current fiscal, while International Monetary Fund (IMF) and World Bank estimate the contraction at 10.3 per cent and 9.6 per cent respectively.

The Indian economy had been slowing even before the pandemic struck. India”s quarterly growth rate has been receding sequentially since Q4 FY18. It recorded a GDP growth of 4.2 per cent in FY20.

Sitharaman further said India is continuing with its policies to attract foreign investment in terms of lower taxation and ease of doing business.

(With inputs from agencies)