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Wednesday, July 15, 2020

FinMin: Govt taking structural reforms to support green shoots in economy

The Ministry said its commitment towards structural reforms would help in building on these green shoots in the economy.

By: ENS Economic Bureau | New Delhi | Published: June 24, 2020 3:19:41 am
Nirmala sitharaman, coronavirus impact on indian business, corornvirus impact indian industries, business news, indian express Finance Minister Nirmala Sitharaman. (File Photo)

The Finance Ministry Tuesday said various indicators suggest that the Indian economy has started recovering and that the Centre is taking more structural reforms to support the ‘green shoots’.

It presented select data points including wheat procurement, railway freight traffic, toll collections and fertiliser sales among others to indicate that the economy is recovering from the slump induced by the economic lockdown to prevent the spread of COVID-19 pandemic. Analysts and various economists, however, expect India to record a steep contraction in GDP in the April-June quarter and experience a recession this year after a long gap.

“Agricultural sector remains the foundation of the Indian economy and with a forecast of a normal monsoon, should support the rebooting of the Indian Economy. Though the GDP contribution of the sector may not be very large (in relation to Industry and Services), its growth has a very positive impact on the large population dependent on agriculture,” the Ministry said in a statement. Agriculture sector accounts for around 16 per cent of GDP, while services and industry form the major chunk of economic output.

The Ministry said its commitment towards structural reforms would help in building on these green shoots in the economy. Wheat procurement by government agencies rose to a fresh high of 382 lakh metric tonnes (LMT) on June 16, 2020, against the previous record of 381.48 LMT during 2012-13. Fertiliser sales have surged nearly 98 per cent year-on-year in May 2020 to 40.02 lakh tonnes, as sowing area for kharif crops rose 39 per cent in as on June 19, it said, adding, “The government and the RBI have taken prompt policy measures — both short term and long term — in a calibrated manner to reinvigorate the economy at the earliest with minimal damage.”

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