Although India is witnessing a recovery in economic activities and businesses, its economic output is expected to remain below the 2019 level, said a report by the US Economic and Social Commission for Asia and the Pacific (ESCAP).
For FY22 starting April 1, the USESCAP report has projected a growth rate of 7 per cent, followed by 6.5 per cent growth in the next fiscal.
Titled 'Economic And Social Survey of Asia And the Pacific 2021', the report noted that India entered the pandemic with subdued GDP growth and investment. Following one of the most stringent lockdowns in the world, the economic disruptions that the country experienced mounted in the second quarter of 2020.
A subsequent change in lockdown policies and success in reducing infection rates supported an impressive economic turnaround in the third quarter, it said.
"However, the pace of recovery moderated in the fourth quarter with estimated year-on-year growth still close to zero. Despite a robust reduction in new Covid-19 cases and the start of vaccine roll-out, India's 2021 economic output is expected to remain below the 2019 level," said the report.
Further, maintaining low borrowing costs while keeping non-performing loans in check would be a challenge, it added.