New Delhi: The US Treasury, the finance department of the federal government of the United States, on Friday (June 10), told the US Congress how the Indian economy rebounded strongly despite three significant COVID-19 waves. The US Treasury, in a report, said that India's acute second wave weighed heavily on growth through the middle of 2021, delaying its economic recovery. "However, economic activity rebounded strongly in the second half of the year as India's vaccination rollout accelerated," it said while praising India's vaccination efforts. The report noted that about 44 per cent of India's population be fully vaccinated by 2021 end, in what could be the world’s largest inoculation programme.
Strong Economic Rebound
While applauding India’s economic recovery, the US Treasury report noted that even after contracting seven per cent in 2020, the output returned to pre-pandemic levels by the second quarter of 2021, with full-year 2021 growth of eight percent. (ALSO READ: Amazon India dedicates month to LGBTQIA community)
Taming of Omicron Variant
The US Treasury said in the report that India faced a third major outbreak driven by the Omicron variant since the start of 2022. However, the country’s decisions helped it to control the number of deaths and broader economic fallout has been limited, it said. (ALSO READ: Gold price today: Yellow metal selling for less than Rs 48,000, good opportunity to invest?)
Financial Support to Economy
The report also pointed out how the Indian government’s fiscal stimulus helped the economy against the backdrop of the pandemic in 2021. The US Treasury said that the authorities estimate that the overall fiscal deficit will reach 6.9 per cent of GDP for the 2022 fiscal year, which is higher than deficits prior to the pandemic.
Controlled Approach Towards Inflation
According to the Treasury, the Reserve Bank of India kept its key policy rates unchanged at four per cent since May 2020, but in January 2021 it began to gradually unwind the extraordinary liquidity measures designed to support growth during the early part of the coronavirus pandemic.
– With PTI inputs.
