The chief economic adviser touched upon a range of issues. Let's see what exactly he said.
India witnessing positive growth in four consecutive quarters, even during the once in a century pandemic, is quite notable. As we have seen growth in the third and fourth quarters (of 2020-21), from the second quarter onwards (of the current fiscal), we should start seeing GDP at pre-pandemic levels, Mr Subramanian said.
On being asked about the possible impact of the new Coronavirus variant Omicron on the economy, the chief economic adviser said that evidence was still evolving on how virulent it would be, compared to the Delta variant. “During the second wave we managed the economy well, as first quarter growth in current fiscal was 20.1 per cent… Important learnings from the second wave will come in handy and vaccination has proceeded quite well, so average immunity will be there. Still we need to be cautious even though evidence on Omicron is still not visible,” he said.
On the overall handling of economy, Mr Subramanian said that both supply as well as demand sides have been managed prudently. Looking at the Rs 1.31 lakh crore GST collections, it is evident that since GST is a consumption-based tax and consumption comes from demand, even analysts have conceded that India has prudently managed economy.
Speaking about key sectors being monitored by the government, the chief economic adviser said that the manufacturing sector, after slightly dipping during the pandemic, has come back to normal levels and growing strongly. The services sector, he said had witnessed double-digit growth in two quarters and in future, depending on how vaccination proceeds and how Omicron impacts economy, it will continue to recover. Production in services and consumption in manufacturing will help GDP grow in future quarters, he said.
On cryptocurrency, Mr Subramanian said that there is a need to make a distinction between benefits which come from blockchain for the real economy and cryptocurrency, which uses the blockchain technology. “Any financial innovation which ends being a zero sum game, doesn't benefit the real sector and has to be treated with very cautiously,” the chief economic adviser said, adding that it should be noted that cryptocurrency as a currency versus cryptocurrency as an asset, needs to be differentiated upon.