The Indian economy began to experience a reversal trend in the third quarter of 2020.
The Indian economy is starting to see an increase in the manufacturing sector and it is estimated that recovery will accelerate as vaccine development progresses.
India’s economic growth contracted 7.5 percent in the third quarter of 2020, this figure is better than the second quarter which was minus 23.9 percent. It is estimated that by the end of the year, India’s economic growth will be at a level of minus 8.8 percent.
Prime Minister Narendra Modi hopes that there will be an easing of the new Agriculture and labor laws, as well as providing tax incentives to increase productivity and investment in the manufacturing sector.
Annual growth in the agricultural sector (YoY) was 3.4%, and manufacturing during the July-September period grew 0.6%.
This improvement is triggered by the Indian government’s plan to distribute vaccines to around 1.4 billion people.
“The Q2 GDP figures are encouraging,” said Krishnamurthy Subramanian, chief economic adviser at India’s Ministry of Finance, quoted by CNBC, Monday, November 30, 2020.
With the improving trend in the manufacturing and agricultural sectors, he estimates that India’s economic recovery could take a ‘V’ shape, which will be assisted by a rising demand for consumer and investment goods.
“Overall, although the recovery provides optimism, vigilance against the pandemic and therefore the economy is still needed,” he explained.
Corona infection cases in India reached 9.3 million people and became the second-highest after the United States (US), with a death rate of 135,715 people.