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Business EYE NOVEMBER 20, 2020 | The Indian Eye 32

signs of revival as reports

show better results in Q2 and

overall GdP growth in 2020

Fitch Ratings says the government’s reform agenda in response to Covid-19 pandemic

has the potential to raise India’s medium-term growth rate

Our Bureau reports, it stated that the central

New Delhi and state governments should
focus on debt consolidation and
iting continuous revisions comply with the fiscal deficit
in India’s GDP estimates and debt levels in their Fiscal
Cas the current norm, Responsibility and Budget Man-
State Bank of India (SBI) re- agement Acts.
vised their second-quarter (Q2) But Fitch Ratings said on
GDP to -10.7 per cent from -12.5 Friday that revival of the central
per cent with a positive bias, in a government’s reform agenda
research report from SBI Ecow- in response to the coronavirus
rap on Friday. pandemic shock has the poten-
The report titled, “Positive tial to raise India’s medium-term
events improve India’s Q2 GDP growth rate.
projections: Losses reduced In a report titled -- India’s
but reasons to remain cautious shopping during the Diwali season has given a boost to the economy (ANi) reforms could support medi-
remain,” was authored by Dr um-term growth -- Fitch Ratings
Soumya Kanti Ghosh, SBI’s The Ecowrap report said Moody’s Investor Service said suggested there will be downside
Chief Economic Adviser. “We there was no doubt that the coun- consumer confidence in India re- pressures to growth and said the
are revising our Q2 GDP growth try’s economy had suffered and mained relatively low amid a con- process of reform in India “re-
to -10.7 per cent (earlier -12.5 per the scarring still remained. The tinued elevated number of daily mained especially complex and
cent) with a positive bias, based Micro, Small and Medium En- new coronavirus cases, although implementation at times proved
on our nowcasting model with terprises (MSME) sector borne it had come down from the peak difficult”. “Raising medium-term
41 high-frequency indicators, the brunt of the COVID-19 pan- in September. “We currently ex- growth rates under these circum-
associated with industry activity, demic and the Export Promo- pect India’s growth to reach 10.8 stances will require reforms to
service activity, and global econ- tion Capital Goods (ECLGS) per cent in the fiscal 2021 (ending support investment and boost
omy. Our estimate of Q2 Finan- scheme was a shot in the arm. March 2022), compared with our productivity,” the report stat-
cial Year (FY) 2021 (or Q3 2020) The report also highlighted earlier forecast of 10.6 per cent, ed, adding that it will take time
is aligned with the economic that corporate results remained and to settle around 6 per cent to assess whether the reforms
growth seen by various econo- good and growth in corporate in the medium term. We have are implemented effectively.
mies in Q3 2020. The GDP con- GVA of 3,640 listed entities was revised our real, inflation-ad- It said several reforms passed
traction halved in Q3 2020 com- at 22.06 per cent year on year justed GDP forecast for fiscal by the parliament since the pan-
pared to Q2 2020 for select 18 (y-o-y) for Q2 FY21 and size- 2020 to a 10.6 per cent contrac- demic set in which could lift me-
economies,” stated the report. wise analysis based on turnover tion, from a 11.5 per cent drop dium-term growth prospects.
According to it, the upward showed resilience in small and previously,” stated the report. The report noted that the agri-
revisions reflected faster recov- medium enterprises. It also said general govern- cultural reforms announced by
ery and the estimates could be Meanwhile, Moody’s on ment fiscal deficit should remain the parliament could give more
better if July and August showed Thursday raised India’s gross do- wide, reaching around 12 per cent flexibility to the farmers to sell
a little bit of traction. The SBI mestic product (GDP) forecast of GDP, with some upside risk, their produce.
business activity index showed for 2020 to 10.6 per cent con- in 2020 and narrowing to about “The agricultural reforms
continuous improvement and traction, from an 11.5 per cent 7 per cent of GDP over the me- brought by the parliament to
expected Q3 numbers to be even contraction projected earlier. It dium term, still above the deficit give farmers more flexibility to
better. “However, the extent of also revised calendar year 2021’s of 6.5 per cent of GDP in 2019. sell their produce is notable.
recovery in subsequent quarters GDP upwards to 10.8 per cent On November 9, the 15th Stripping out middlemen, as the
could only be gauged after the compared to the earlier forecast Finance Commission submit- reform allows, could improve
actual Q2 numbers were pub- of 10.6 per cent. ted its report for 2021-25 to the farmer incomes while reducing
lished,” the report stated. The report released by president. According to media consumer prices,” it stated.

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