With the COVID infection rate in India reducing and cities unlocking in phases, the Indian economy is on its path to recovery. After slumping by a sharp 24% in April-June 2020, the GDP contraction was relatively muted at 7% in July-September 2020. Most economic parameters are now inching closer to the pre-COVID levels and some indicators have also started recording growth compared to the previous year. Index of Industrial Production recorded a strong growth of 3.6% in October 2020 (eight month high), while PMI (Purchasing Managers Index) for November 2020, lower than the pre-COVID level of around 7%. Business sentiments have also started improving as reflected in the latest Industrial Outlook survey conducted by RBI.

Supportive measures from RBI and the Government have aided the economic revival. RBI has cut policy interest rates, while announcing various other measures for liquidity infusion, one-time loan restricting and targeted supportive measures for NBFCs, MSMEs, real estate sector and other stressed sectors. The government has also come up with measures to aid demand revival, support stressed sectors, generate employment opportunities, while also increasing budgetary allocation for capital expenditure. Additionally, the government has announced measures to boost the manufacturing sector and attract higher FDI, while introducing some long-pending reform measures for the labour and agriculture sector. Structural reforms were announced for sectors like coal mining, power distribution, atomic energy, defense and aviation. These structural reforms will have a positive impact in the medium to long-run