It seems the Economic Package announced by the Finance Minister has hit the right chord in the market. The sentiments are rising and the investments are expected to flow inwards. At least the reports published by the rating agencies say so. The latest report issued by Fitch Ratings says that the Indian economy is likely to bounce back with a sharp growth rate of 9.5 percent next year.
The Fitch Ratings said that if the government could restrict further deterioration of the financial sector, it will be able to bounce back with solid performance. Additionally, Fitch Ratings forecasted a 5 percent contraction in the GDP in the ongoing financial year as the coronavirus pandemic will lead to shrinking of the already slowing economy.
Interestingly, if the predictions by the rating agencies stand true, this will be the sharpest rise in the GDP on a year on year comparison. Also, this would give a much-needed boost to the FDI drive the Narendra Modi Government is working on since its coming into government in the year 2014.
For now, it gives a much-needed breather to the government agencies that were busy explaining the critics. There are many ‘self-claimed’ economists who questioned Modi Government’s Rs 20 Lakh Crore Economic Package to reenergize the economy. The package primarily focused on revitalizing the manufacturing sector. It announced many stimulus packages for MSMEs, agriculture, and aviation and defense segments. The critics complained that the package did not include any direct cash transfer to the general public at large.