Strategic reforms and the rapid vaccination drive has placed the country on the path to swift recovery by enabling the economy to “navigate the ravaging waves” of the COVID-19 pandemic, according to the Finance Ministry’s Monthly Economic Review.

Sustained and robust growth in agriculture, sharp rebound in manufacturing and industry, resumption of services activity and buoyant revenues suggest that the economy is progressing well, the September review said.

“India is well-placed on the path to swift recovery with growth impulses visibly transmitted to all sectors of the economy… Strategic reforms undertaken so far along with new milestones in vaccination drive have enabled the economy to navigate the ravaging waves of the COVID-19 pandemic,” it said.

The external sector continues to offer bright prospects to India’s growth revival as the country’s merchandise exports crossed the USD 30-billion mark for the sixth consecutive month in fiscal year 2021-22, it said.

With merchandise trade deficit also rising in September, there is clear evidence of consumption and investment demand is also picking up in India, it said, adding, the external debt-to-GDP ratio continues to remain comfortable, declining to 20.2 per cent at the end-June 2021, from 21.1 per cent at the end-March 2021.

In tandem with growth impulses witnessed across the economy, the report said, the rate of growth of bank credit stood at 6.7 per cent YoY in the fortnight ending September 10, 2021 compared to 5.3 per cent in the corresponding period of the previous year.

With restoration of supply chains, improved mobility, and softening food inflation, consumer price index (CPI) inflation retreated to a four month-low of 5.3 per cent in August 2021, clearly demonstrating that inflationary tendencies are pandemic-induced and transitory.

However, it said, volatile prices in the international crude oil markets and upward-bound prices of edible oils and metal products may continue to pose concerns.

Comfortable levels of systemic liquidity and softening of inflationary pressure have also lent stability to G-Sec yields in September 2021. The 10-year yield remained unchanged at 6.2 per cent compared to August.

Latest trends in high-frequency economic indicators in August and September further indicate a broad-based recovery evidenced in sustained improvement in power consumption, rail freight activity, e-way bills, robust GST collections, highway toll collections posting a 21-month high, sequential uptick in air freight and passenger traffic, and quantum leap in digital transactions.