GatiShakti, PLI scheme will offset global headwinds, boost growth: FinMin report

‘Impact of geopolitical tensions on food, fertilizer, crude oil prices casting cloud on growth propsects’

Gatishakti and the production-linked incentive (PLI) schemes will offset global headwinds and drive investment, resulting in high post-recovery growth for the Indian economy, according to a Finance Ministry report.

Geopolitical conflicts and their consequent impact on food, fertilizer and crude oil prices cast a cloud on the growth outlook globally, as per the monthly Economic Review prepared by the Ministry.

India may feel its impact although the magnitude will, of course, depend on how long the dislocations in energy and food markets persist in the financial year and how resilient India's economy is to mitigate the impact, ithe Ministry pointed out, adding that transient shocks may not have a big effect on real growth and inflation.

"Offsetting these potential headwinds, GatiShakti and Production Linked Incentive Schemes will drive investment, which will combine with supply chains strengthened by structural reforms taken in the past few years to deliver high post-recovery growth for the Indian economy," it said.

With growing evidence of improving labour force participation and declining unemployment rate and the government's unwavering commitment to provide continued support to the economically poor (the PM Gharib Kalyan Yojana was extended for another six months, up to the end of September 2022), the growth path ahead would likely be a more inclusive one, it said.

PMI Services has also stayed in the expansionary zone continuously for eight months on the back of e-toll collection, e-waybill, railway freight and air cargo, among others, complementing the robust manufacturing sector, the Ministry noted.

GST collections had breached the ₹1.4 lakh crore mark in March, heralding the onset of post-recovery growth, it said, adding that elevated PMI Services also reflect growth in contact-based services, as States progressively relax pandemic-induced restrictions in view of India's COVID-19 vaccination coverage expanding faster than the decline in cases of new infections.