The Time Press

All set for a reset

The finance ministry’s Monthly Economic Review for January released on Wednesday strikes an optimistic note. It highlights how India’s economy may be poised to expand at the fastest pace among major economies in 2022-23, extending its sharp recovery from last year’s huge pandemic-induced contraction. The current year, it says, is likely to yield to an “economic reset” in a “post-covid world”, as we put the health crisis behind us. Manufacturing and construction are seen as major growth drivers, powered by production-linked incentives and public capital expenditure.

While the ministry’s expectation of a “reset” is drawn from its policy initiatives, we could also ponder the possibility of an extraordinarily strong surge in consumer spending next year, a relief boom as witnessed in the West after the “Spanish Flu” of the early 20th century. That was attributed to a psycho-social shift in attitudes, a collective desire to live life to the fullest. That India’s globalized well-off will display similar behaviour once covid ceases to be a threat seems probable. Unlike in rich countries, our big spenders may be too few to impact overall demand much, but it would help the economy all the same.

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