PROTECTING THE ECONOMY.

 According to Reseve Bank of India spillovers from imminent shifts in monetary policy by major global central banks and a possible jump in infections from omicron variant could dent the Indian economy's ongoing recovery. India's public health management response to tackle Covid19 depend on the five fold strategy- test, track ,treat,vaccnate and appropriate behavior of wearing mask,sanitization and social distancing. It has been observed that primary immunization prevents severe disease, hospitalisation and death. Ensuring vaccine availability across the world should be the priority of all countries, of course national governments would give priority to their people first . At present the we are in a position to revive Vaccine Maitri initiatives in an accelerated pace.So far India has administered 1.25 billion doses of vaccines and supplied more than 72 million vaccine doses to over 90 countries by way of coordinated global action. Infact pandemic in any particular part of the world is a threat to everyone. Inspite of the pandemic as things stand today  the Indian economy is relatively well positioned on the path of recovery, but it cannot be immune to global developments or to possible surge of infections from new mutants.

  As per NSO estimate our GDP grew at 8.4% in quarter 2 (july-september)of the fiscal year 2021-22 compared to a contraction of-7.4% a year ago. Factoring in the first quarter GDP growth of 20.1%the first half of this year has recorded 13.7% growth and according to Chief economic Advisor country is likely to achieve two digit growth for the entire year 2021-22.It may be noted that Core sectors like cement, coal,electricity and refining witnessed 7.5% growth in October compared to 4.5% estimated growth in September. The eight core sectors together accounted for 40.27% of the weight of items included in the index of industrial production(IIP). Economic activity in q2 was supported by growth in industrial and service sectors along with healthy central and state government spending, robust merchandise exports and continued demand from agricultural sector.However the manufacturing sector which accounts for 77.63% IIP grew only 2% in October as per NSO data.Mining output rose sharply 11.4% while power generation increased by 3.1% .Factory output registered double digit growth from May to August thereafter declined to 3.3% in September and 3.2% in October 2021 mainly due to the low base effect.In October 2021 the IIP stood at 133.7 points compared to 129.6 points last year and 124 points in October 2019.

         Amidst the threat of new mutants of Corona virus globally many economies are reaching pre pandemic levels. However facing uncertainties of stubborn inflation, elevated energy and commodity prices and continuing supply bottlenecks pose real challenges .In this context Monetary policy committee (MPC) voted unanimously to hold interest rate and by a 5-1 majority opted to retain the accommodative policy stance as  long as necessary.Accordingly the benchmark repo rate remains unchanged at 4% Marginal Standing Facility (MSF) at 4.25% and reverse repo rate continues to be at3.35% . GDP growth rate projected by RBI for current year remained unchanged at 9.5% and CPI inflation at 5.3%.It was very significant to keep inflation realigned with the target while focusing on a robust growth recovery. Both price stability and economic growth remain the candid principles of monetary policy.

      As per the recent World Inequality Report 2022 India is among the most unequal countries in the world with rising poverty and the affluent elite.The top 10% and 1% in India hold 57% and 22% of total national income while the bottom 50% share has gone down to mere 13% . The average national income of India's adult population is rupees 204200, wherein the bottom 50% earns rupees 53610 only in contrast to the top 10 % earning rupees 1166520 over twenty times more.Estimates showed that average household wealth in India is rupees 983010 whereas bottom half own only average of rupees 66280 or 6% of the total.Middle class with rupees 723930 account for 29.5% . The top 10% owns 65% of the wealth average of rupees 6354070 and the topmost 1% owns 33% averaging 32449360. Most importantly in 2021 the wealthiest 10 percent of the population own 65 percent of total household wealth in India.

   Above discussion indicate that we have vaccinated a substantial segment of our population. Country is poised to achieve near double digit GDP growth. Inequality is rampant in India with rising poverty and the top 1% of population holding 22% of total national income. Despite positive growth, poverty,  unemployment,inflation and mounting inequality pose great challenges. Pandemic related issues of households and MSMEs need to be studied and addressed. Fiscal policy  along with investment in health care and education should revamp rural and urban employment programs and provide necessary safety nets to the needy.  Multilateralism and collective action along with investment innovation and institutions support to the path of global recovery is very much vital