The Indian economy is coming out of the pandemic-induced degrowth and GDP growth will enter the positive territory in the fourth quarter of this fiscal, Niti Aayog Vice-Chairman Rajiv Kumar said on Wednesday.
In an interview to PTI, Kumar also said the Centre’s new agriculture reform laws are aimed at increasing the income of farmers and the present agitation was a result of misunderstanding and miscommunication which need to be removed.
“The second quarter GDP figure (contraction of 7.5 per cent) reflects that the economy is coming out of this pandemic-induced degrowth phase and my expectation is that in the third quarter, we will achieve the same level of economic activity as the year ago period.
“And the fourth quarter will show a small but positive growth over the previous year because the government has used this period for ushering in many structural reforms and some more are in the pipeline,” he said.
Kumar noted that the COVID-19 pandemic had an unprecedented negative impact on economic activities, but this was completely in the nature of a natural disaster and not related to the regular economic cycle.
“Therefore, it is quite irrelevant to talk about the economy being in a technical recession,” he emphasised.
India’s economy recovered faster than expected in the September quarter as a pick-up in manufacturing helped GDP clock a lower contraction of 7.5 per cent and held out hopes for further improvement on better consumer demand.
The Gross Domestic Product (GDP) had shrunk by a massive 23.9 per cent in the first quarter as the COVID-19 lockdown pummelled economic activity.
Replying to a question on protests by farmers, mainly from Punjab and Haryana, against the Centre’s agriculture reform laws, Kumar said there is need to recognise that the new farm laws have been well received all over the country.
“The three farm laws were clearly intended to improve farmers’ ability to increase their income and they give greater freedom and liberty to sell, where they like and to whom they like.
“…the present agitation is most likely a result of miscommunication and some misunderstanding which needs to be removed,” he opined.
Talks between the Centre and agitating farmer unions remained inconclusive on Tuesday. The two sides will now meet again on Thursday, while support from more quarters poured in for the thousands of protesters camping at Delhi borders.
The farmer unions rejected the government’s offer to set up a committee to look into issues raised by them and said they will intensify their stir until their demands are met.
On September 27, President Ram Nath Kovind gave assent to the three farm bills — The Farmers’ Produce Trade and Commerce (Promotion and Facilitation) Bill, 2020; The Farmers (Empowerment and Protection) Agreement of Price Assurance and Farm Services Bill, 2020; and the Essential Commodities (Amendment) Bill 2020.