Economic capsule-2

 V shaped recovery?

As per Govt of India's observation economy is firmly on the path of V shaped recovery after the collapse in the first quarter, improvement in the second quarter and further improvement is expected in the third quarter of 2020-21.A V shaped recovery is characterised by quick and sustained revival in economic performance.The high frequency indicators mentioned by the Government included manufacturing pricing manager's index PMI eight core industries e-way bills, khariff crop, power consumption, railway freight Cargo traffic, and passenger vehicles sales.N S O figures showed that gross fixed capital formation increased in q2 by 60% . While exports and private final consumption expenditure showed increase unfortunately govt final consumption expenditure declined by 25% .

          Decline in public expenditure will severely affect growth.When 1% of Indians own 39% of wealth and where we have 4593 people whose networth is more than$50 million including individuals with$34 billion and$74.4billion if determined resource mobilisation won't be difficult.Increased public expenditure will necessarily sustain V shaped recovery.

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