INSUBCONTINENT EXCLUSIVE:
Finance Ministry said that there are visible signs of economic revivalThe finance ministry on Tuesday said the economic impact of the second
wave of the COVID-19 pandemic is likely to be muted and there are visible signs of economic rejuvenation
The latest Monthly Economic Review, released by the finance ministry, said the "robust recovery in tax collections cushions the fisc towards
meeting the budgeted support to the economy".It also said the recent sero-prevalence results signify that India can reduce the likelihood of
severe illness due to COVID-19 if the country sustains the momentum of the vaccination programme
"Having antibodies reduces the probability of acquiring serious illnesses, as is borne by studies
So, any subsequent waves are expected to be mild in terms of severity of disease," the ministry said in the report.However, it is imperative
that COVID-appropriate behaviour and due protocol is followed
At this juncture, it said, the economy and society are at a crucial inflection point where sustenance of economic recovery, vaccination
progress and COVID-19 appropriate behavioural strategies are needed in close synergy with each other.With the second wave abating in most
parts of the country and state governments lifting the restrictions in phases, there are visible signs of economic rejuvenation since the
second half of May, it said
"This resonates with the economic impact of the second wave expected to be muted," the report added.Noting that inflation has remained above
the band of six per cent in May and June, the report said these pressures are likely to smoothen out in the coming months, with easing of
restrictions, progress of southwest monsoon, and recent supply-side policy interventions in pulses and oilseeds market.It said that while
systemic liquidity continued to remain in surplus in July, a decline in growth of cash in circulation reflected a shift away from the
pandemic-induced precautionary savings
Financial markets demonstrated buoyancy in the month, with post-second wave revival seen in mutual funds, corporate bonds and insurance
markets, and volatility in equity markets continuing its downward trajectory.However, G-sec yield curve steepened mildly owing to inflation
The ministry added that bank credit growth showed encouraging trends with non-food credit growth crossing the 6.5 per cent-mark in the
fortnight ended July 16 after remaining muted for nine fortnights.On the sectoral front, credit offtake by agriculture and allied
activities, micro, small and medium industries registered accelerated growth in June, demonstrating positive effects of the implementation
of the Aatmanirbhar Bharat package.The central government's finances showed an improved performance during the June 2021 quarter as
compared to the year-ago period
It was on the back of buoyant direct and indirect tax collections, continued emphasis on capital expenditure with 26.30 per cent growth
