Claiming that the Indian economy is showing signs of recovery from the peak of the second wave of COVID in May, the government said on Monday that the country’s strong fundamentals and market size will continue to attract investment to create new markets. .
Citing the World Investment Report 2021, Finance Minister Nirmala Sitharaman in a written response to Lok Sabha said that FDI inflows to India rose 25.4% to $ 64 billion in 2020, from $ 51 billion. dollars in 2019, becoming the fifth largest beneficiary of the world in 2020, against the eighth place it occupied the year before.
However, entirely new projects announced in India contracted by 19% in 2020, she said, adding that the drop is significantly smaller than the 44% drop in developing economies.
“As evidenced by the overall FDI inflows, India’s strong fundamentals and market size will continue to attract entirely new investment seeking markets,” she said.
In a response to another question, Minister of State for Finance Pankaj Chaudhary said India’s foreign exchange reserves as of June 25, 2021 stood at $ 608.99 billion.
India has become the fifth largest holder of foreign exchange reserves in the world after China, Japan, Switzerland and Russia, he said in a written response to Lok Sabha.
âIndia’s foreign exchange reserves position is comfortable in terms of coverage of imports over 18 months and provides protection against unforeseen external shocks. The government and the RBI are closely monitoring emerging policies or regulations to calibrate the external position to support robust macroeconomic growth, âhe said. .
Responding to another question, Chaudhary said that “the Indian economy shows signs of recovery from the peak of the second wave in the first half of May 2021 thanks to targeted budget relief, a strong surge in spending in capital, RBI monetary policy measures and a rapid vaccination campaign. ” This is reflected in the movement of several high frequency indicators such as electronic invoices, energy consumption, rail freight, UPI transactions, vehicle registrations, etc., he said.
Regarding India’s 7.3% gross domestic product (GDP) contraction in 2020-2021, Sitharaman said this reflects the unprecedented effect of the COVID-19 pandemic “once in a year.” century âand the containment measures that have been taken to control the pandemic.
The fundamentals of the economy remained strong as the gradual reduction of bottlenecks, along with astute support from the Aatmanirbhar Bharat mission, put the economy firmly on the path to recovery from the second half of the fiscal year. 2020-21, she added.
According to the World Bank’s June 2021 Global Economic Outlook, she said, global growth for 2021 has been revised up to 5.6%, largely due to the sharp rebound in major economies thanks to the continuation of immunization and substantial budget support.
India is expected to grow at a significantly faster rate compared to global average growth.
The Indian government is committed to picking up the pace and expanding the reach of COVID-19 vaccination across the country, she said, adding that the average daily vaccination rate has doubled to 41, 3 lakh doses in June compared to 19.3 lakh in May, following the implementation of the revised national COVID vaccination policy since June 21, 2021.
India has now passed the 38 crore mark for its cumulative COVID vaccine coverage with 23% of the population covered by the first dose and 5.6% of the population fully vaccinated, she added.
On June 28, 2021, the Indian government announced a stimulus package of Rs.628,993 crore, the finance minister said in another response.
The package aims to boost various sectors of the economy affected by the COVID-19 pandemic, she said, adding that the government has announced a total of 17 measures in three broad categories: economic relief from the pandemic, strengthening of public health and impetus for growth and employment.
The finance minister further stated that combined CPI inflation in June 2021 was 6.26%, compared to average combined CPI inflation of 6.16% in 2020-2021.
The weight of fuels like gasoline, diesel and other fuels in the combined total CPI is only 2.52 percent, she said.