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India Sees 'Strong Recovery' Take Root, Sitharaman Says

The Indian economy, which the International Monetary Fund singled out as a global bright spot only a few years ago, was the worst performing major economy globally in the April-June period, contracting 23.9% amid a stringent lockdown to curb the spread of the pandemic.

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 India's economy is seeing a strong recovery taking root, Finance Minister Nirmala Sitharaman said on Thursday, citing data that included an increase in tax collections for goods and services.

The recovery is due not only to pent-up demand, Sitharaman told a news conference, ahead of announcing a new set of stimulus measures.

Sitharaman said increased energy consumption, a rise in the purchasing managers' index, improved bank credit and a stock market surge all suggested stimulus measures taken so far had begun to help the economy bounce back.

The Indian economy, which the International Monetary Fund singled out as a global bright spot only a few years ago, was the worst performing major economy globally in the April-June period, contracting 23.9% amid a stringent lockdown to curb the spread of the pandemic.

The economy is expected to contract close to 10% in the fiscal year to March 2021, but Sitharaman noted that the Reserve Bank of India had predicted a strong likelihood that the economy may begin to show growth in the ongoing fiscal third-quarter.

Sitharaman said the government is also launching a scheme to incentivise the creation of new jobs, in a bid to fuel a rebound.

Despite Sitharaman's buoyant tone, markets weakened as the press conference progressed on Thursday. The NSE Nifty 50 index fell 0.92%, while the S&P BSE Sensex fell 1% by 0814 GMT. The indexes had been down 0.3% and 0.4% respectively before the conference began.

(Reuters)


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