InvestorQ : Do you see the growth recovery in GDP happening soon enough?
manisha Kolvenkar made post

Do you see the growth recovery in GDP happening soon enough?

Mahima Roy answered.
11 months ago

GDP growth for fourth quarter is not as bad as some cynical estimates had warned of. The June quarter is likely to be a major wash-out and that is evident from the deep cuts in PMI and core sector data for April 2020. Most businesses are expected to be largely functional by end of June, but the lag effect could longer for some more time. Weak demand, sluggish labour conditions and the inadequate absorption of fixed costs may be the challenges. What should the government focus on to get growth back on track? That is hard to say but the government has already made the effort. More than the weakness in the first two quarters of FY21, what is really material is how the recovery is managed after that. RBI has cut repo rates by 115 bps and the government has given a comprehensive stimulus package of $270 billion. The immediate challenge will be to encourage business with a combination of fiscal incentives and monetary looseness. India has proved in the past that a sharp recovery is perfectly possible if managed well. That should be the focus; growth will follow!