As the International Monetary Fund (IMF) has kept India’s growth forecast for 2021 unchanged at 9.5 per cent, its Chief Economist Gita Gopinath has said that to sustain the growth trajectory, the country has to maintain the vaccination rate and Said that public infrastructure investment will accelerate economic recovery. At the same time, he said that inflation and unemployment are the major factors which the government will have to keep an eye on.
“The manufacturing and services sectors have shown improvement after crushing the second wave of the coronavirus pandemic, but the area of focus will be public infrastructure investment, as growth is going to come from there,” Gopinath told NDTV.
He said coal sector, high oil prices and inflation are some of the major factors that India will have to keep an eye on. “Secondly, India has to vaccinate to combat the pandemic. Keep your confidence high, inflation is important as core inflation is high in India and this needs to be looked into.”
Also, it can be carefully observed that while the listed companies have recovered, it is the micro, small and medium enterprises that have been badly hit by the pandemic and “given the fact that many people have not been able to return Work, employment is still a distance,” Ms Gopinath added.
IMF chief economist said people are still using rural employment insurance money to survive and it is a real indicator of growth.
“These are uncertain times, there is always the risk of financial sector exposure and the risk of infection, so such indicators have to be taken care of,” she suggested.
He advocated greater financial support for the household and health sectors in near-term and cut borrowing costs while keeping the fiscal deficit under control.
He said the high rate of vaccination has kept India’s growth buoyant and helped by the fact that a large part of the population has received at least one dose.
Ms. Gopinath emphasized the fact that nearly 75 per cent of countries will not be able to meet the target of immunizing 40 per cent of their population by the end of this year, especially in Africa. In light of this fact, India can play an active role in exporting vaccines to such countries.