New Delhi: The government asserted Monday that the Indian economy is showing signs of revival after the 2nd Covid-19 wave. The government stated that India’s strong fundamentals and market size will continue to attract market-seeking greenfield investments. This was stated by Finance Minister Nirmala Sitharaman. She quoted the World Investment Report 2021 while giving a written reply in Lok Sabha. Nirmala Sitharaman said FDI inflows into India rose by 25.4 per cent to reach USD 64 billion in 2020, from USD 51 billion in 2019. India thus became the fifth largest recipient in the world in 2020, up from eighth position it held in the previous year.
However, the announced greenfield projects in India contracted by 19 per cent in 2020, Sitharaman said. She added that this decline is significantly lower than the 44 per cent decline in developing economies.
“As has been witnessed in overall FDI inflows, India’s strong fundamentals and market size will continue to attract market-seeking greenfield investments,” Sitharaman stated.
In a reply to another question, Minister of State for Finance Pankaj Chaudhary said, India’s forex reserves as on June 25, 2021 stood at USD 608.99 billion. India has emerged as the fifth largest foreign exchange reserves holder in the world after China, Japan, Switzerland and Russia, he added.
“India’s foreign exchange reserves position is comfortable in terms of import cover of more than 18 months. It provides cushion against unforeseen external shocks. The government and RBI are closely monitoring the emerging external position calibrating policies or regulations to support robust macroeconomic growth,” Chaudhary stated.
With regard to India’s contraction in Gross Domestic Product (GDP) by 7.3 per cent in 2020-21, Sitharaman said this reflects the unparalleled effect of the ‘once in a century’ Covid-19 pandemic and the containment measures that were taken to control the virus.
According to the World Bank’s Global Economic Prospects June 2021, she said, global growth for 2021 has been revised upward to 5.6 per cent, largely due to the sharp rebound in major economies driven by continued vaccination and substantial fiscal support. India is expected to grow at a significantly faster rate compared to the global average growth, asserted Sitharaman.