India to register double digit growth this fiscal, recovery will be strong: Niti Aayog VC

Niti Aayog Vice-Chairman Rajiv Kumar on Sunday said that India will achieve double-digit growth in the current fiscal. He added that the disinvestment climate looks better in the current financial year. The country is prepared to handle the next COVID-19 wave better as the states have learnt their lessons in the past, Kumar asserted.

Speaking to PTI, Kumar said, "We are now hopefully getting past our (COVID-19) pandemic... and the economic activities will be strengthened as we get into the second half of this (fiscal) year given what I have seen for example various indicators, including the mobility indicators".

Believing that India's recovery will be "very strong", the Niti Aayog VC said that agencies that cut India's growth forecast may have to revise them. "Because I expect India's GDP growth this (fiscal) year would be in double digits," he said.

Global rating agencies cut India's growth forecast

Fitch Ratings on July 7 revised India's growth forecast to 10% from 12.8% estimated earlier due to slow recovery after the second covid wave.

“Fitch Ratings revised down India’s real GDP for FY22 by 280bp to 10%, underlining our belief that renewed restrictions have slowed recovery efforts and left banks with a moderately worse outlook for business and revenue generation in FY22,” it said.

Similarly, S&P Global Ratings lowered the growth outlook for the current fiscal to 9.5 per cent from 11 per cent earlier. “We forecast growth of 9.5% this fiscal year from our March forecast of 11%,” S&P said stating damages due to lockdowns imposed by states in April and March.

Meanwhile, the Reserve Bank of India (RBI) revised growth to 9.5%, from 10.5% earlier, in the current financial year that ends on Match 31, 2022.

'Disinvestment climate looks better'

Responding to a question if the government would be able to achieve its disinvestment target, Kumar said markets have remained afloat and touched new heights despite the second wave. 

"I think this sentiment not only will continue but it will strengthen as we go forward... India story remains very strong especially with respect to the FDI which has now created a new record both for 2020-21 and between April to June in 2021-22," he said.

Pointing out startups queuing up for IPOs, Kumar said," the climate for disinvestment is looking better and I am very hopeful that the disinvestment target would be fully realised."

The government has budgeted Rs 1.75 lakh crore from the disinvestment of some major public sector companies, including BPCL and LIC during the current financial year. Reaching the goal would be important for the government to cope up with financial stress due to the pandemic and an increase in spending activities.