Former RBI governor and economist Dr. C Rangarajan says the year 2021-22 will be the year of correction, while 2020-21 will end with a net GDP contraction of around 8 percent.
Union Budget 2021: In a year that saw India technically slide into recession, witness an implosion in the labor market, put the spotlight on health – of both those with or without wealth, there is now a glimmer of hope. The start of 2021 is expected to start delivering deliverance from the virus with the first wave of vaccines getting ready. Equally crucial for the bruised economy to hinge its hopes on the Union budget 2021 for measures to not just ensure growth but also help regain the lost ground this year.
Dr. Rangarajan began by saying: “the year 2021-22 will be the year of correction. This year – 2020-21, as the various estimates suggest, will end with a net contraction in the Gross Domestic Product (GDP) of around 8 percent. Therefore, the year 2021-22 must aim to correct this fall in GDP.”
To ensure the economy bounces back to the pre-pandemic level and helps the economy recover the lost ground this year, he says, “the economy needs to grow at 8 percent in 2021-22 to regain the lost ground. We need a growth rate that will try to offset the decline in 2020-21.”