India’s Economy to Rebound as Pandemic Prompts Reforms

IMF News, November 12, 2021

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India’s economy is poised for a rebound after enduring a second wave of COVID-19 infections this year that further constricted activity and took a heavy toll on its people.
New infections have fallen significantly and vaccination rates have risen to surpass a billion doses.
“There's a lot of uncertainty about COVID,” Luis Breuer, IMF’s senior resident representative to India, said in a recent IMF podcast. “We cannot rule out future waves.”
The path of recovery will follow the path of the virus.

India’s broad range of fiscal, monetary and health responses to the crisis supported its recovery.
Economic reforms, together with policy responses, are helping to mitigate a longer-lasting adverse impact of the crisis, according to the latest annual review by IMF staff.
Though policy steps helped mitigate the pandemic, it’s still likely to result in greater poverty and inequality.

Recovery strength is conditional on the evolution of the pandemic; setbacks (future waves) remain possible.
Continued emphasis on health measures, vaccination rollout, and supportive fiscal and monetary policy is implied by the analysis to sustain rebound momentum and limit long-term scarring.

Source: IMF, November 12, 2021.