India growth forecast: Niti Aayog chief Rajiv Kumar rejects zero growth forecast for India, expects strong pick up after lockdown ends

NITI Aayog vice chairman Rajiv Kumar has predicted a strong pick up of economic activity once the lockdowns ends on May 3.

Speaking to ET NOW, he said that those who are predicting a zero growth scenario may turn out to be wrong as the economic activity will pick up strongly once the lockdown is lifted. He said those who are making forecasts of zero growth at this point are brave enough as it is still not clear what the severity or length of the virus infection will be and that is why it is a bit premature to make such forecasts.

Acknowledging that the first quarter of FY21 from April to June could be impacted significantly negatively as one whole month of output will be impacted due to the lockdown getting extended to May 3, he emphasised that the Rabi crop harvest, a major input in computation of growth, will not be impacted.

The NITI Aayog boss said that India Inc may not suffer much in areas that have been permitted to operate from April 20. He also said that those industries that have not been allowed to function may get some relief from packages that might be forthcoming.

The government has allowed some form of economic activity to resume operation after April 20 but with strict adherence to guidelines and protocols laid down for stopping the spread of coronavirus like maintaining social distancing, wearing of face masks among others.

Various forecasts for India’s economic growth have painted a bleak picture for 2020. Barclays predicts India’s economic growth to fall to zero per cent for 2020 while the IMF has projected a growth rate of 1.9 per cent for India in 2020.

Former chief economic advisor Arvind Subramanian has disputed these figures calling them “too optimistic”. In a webinar organised by NCAER, Subramanian said,”The number given by the World Bank and IMF in terms of the changes are way too optimistic because even if we lose one month’s output, we are talking about pretty negative rate of growth and that is what should determine how we respond.”

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