Addressing the Indian Banks' Association, Indian Finance Minister Nirmala Sitharaman has said that sustainable indications of economic revival are visible, despite the country facing major challenges due to the COVID-19 pandemic.
"We have to find a way of doing business even as we are awaiting a vaccine", Sitharaman told the bankers, adding that after the COVID-19 pandemic ends, the government is considering setting up large-scale banks.
Sitharaman's remarks come on the heels of the the Indian Ministry of Finance's economic report for the month of October that also pointed at recovery in various economic sectors.
"October witnessed strengthened momentum of economic revival cutting across sectors, with encouraging trends visible in real activity indicators like healthy Kharif output, power consumption, rail freight, auto sales, vehicle registrations, highway toll collections, E-way bills, GST collections, PMI indices, and digital transactions", the monthly economic report pointed out.
"India's manufacturing purchasing managers' index (PMI), rose to 58.9 in October - the strongest improvement in over a decade. Growth was led by the intermediate goods category with robust growth also in the consumer and investment goods sub-sectors", the report added.
On 30 October, Sitharaman projected very optimistic economic growth in the current financial year. She claimed that India's economic growth will remain almost flat in the current financial year.
However, on the macro-economic front, global financial agencies have indicated that India will face a deep recession in the current financial year.
The World Bank has projected that the country's GDP is likely to contract by 9.6 percent due to the "national lockdown and pandemic shock". A national lockdown was imposed in India on 25 March to curb the contagion. The lockdown remained in force until the end of May.
The International Monetary Fund also recently said that the Indian economy may contract by 10.3% in the current financial year.
Goldman Sachs too maintains that the Indian economy will witness a 14.8 percent contraction, while India Ratings has said that the country will see an 11.8 percent contraction in its GDP.