Second Covid Wave Could Cause 'Greater Uncertainty', Govt Will Respond With Fiscal Steps If Needed: Niti Aayog Official
"We need to prepare for greater uncertainty, both in consumer and investor sentiments," Niti Aayog Vice-Chairman Rajiv Kumar.
New Delhi: Due to the second wave of coronavirus pandemic, the country needs to prepare for "greater uncertainty" in both consumer and investor sentiments, Niti Aayog Vice-Chairman Rajiv Kumar said on Sunday adding that the government will respond with necessary fiscal measures when required.
The Vice-Chairman recognised that the Covid spike has made the current situation far more difficult than it was in the past but he nevertheless remained hopeful that the country's economy will grow 11 percent in the current financial year ending March 31, 2022.
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State governments are once again putting up stricter restrictions as the Coronavirus crisis escalates on daily basis, seeing this situation, a process of reverse migration can also be witnessed in certain areas as daily wage workers return home fearing the possibility of lockdown.
According to Niti Aayog Vice Chairman Rajiv Kumar, India was near the point of defeating Covid-19 completely but some of the mutant strains from the UK and other countries have made the situation far more difficult.
"Apart from their direct impact on some sectors like the services sector, the second wave will increase the uncertainty in the economic environment which can have wider indirect effects on economic activities. So, we need to prepare for greater uncertainty, both in consumer and investor sentiments," Kumar told news agency PTI.
When asked whether the union government plans to come up with a fresh stimulus like last year's 'Aatmanirbhar Bharat' package, the Niti Aayog vice-chairman stated that it can be known only after the finance ministry analyses both the direct and indirect impact of Covid's second wave.
"And as you have seen from RBI's response, the expansionary policy stance has been continued and I am sure the government will respond with necessary fiscal measures also as and when it is necessary," Kumar said.
Last year amid the first wave of Coronavirus pandemic, the Union government had announced the 'Aatmanirbhar Bharat' package to boost the economy and also to provide necessary assistance to the needy. The overall stimulus was stated to be worth around Rs 27.1 lakh crore and more than 13 percent of the national GDP.
Meanwhile, Kumar has said that various estimates suggest India's growth in the current financial year will be around 11 percent.
The RBI, in its last policy review, projected growth of 10.5 percent for FY'22 while the Economic Survey which was tabled in Parliament earlier this year, estimated 11 percent growth during the year.
Besides this, as per official estimates, the Indian economy is projected to contract by 8 percent in 2020-21.
(With Agency Inputs)
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