Economy to reach pre-Covid-levels by end of FY2022: Niti Aayog

India's economic growth is likely to reach pre-COVID-19 levels by the end of the 2021-22 fiscal as the GDP contraction in this financial year is expected to be less than 8 per cent, Niti Aayog vice chairman Rajiv Kumar said on Sunday.

The Reserve Bank of India (RBI) has also revised its forecast of economic growth for the current fiscal year (2020-21) to (-)7.5 per cent as against its earlier forecast of (-)9.5 per cent.

"We should reach pre-COVID-19 levels at the end of fiscal year 2021-22 for sure," Kumar told PTI when asked about growth projection for the next financial year.

He added that the GDP contraction this fiscal is expected at less than 8 per cent.

India's economy recovered faster than expected in the September quarter as a pick-up in manufacturing helped GDP clock a lower contraction of 7.5 per cent and held out hopes for further improvement on better consumer demand.

Replying to a question on asset monetisation, he said this is ongoing work and it has received attention at the highest level.

"We will continue to pursue this and make sure that the targets of asset monetisation are reached," Kumar stressed.

The government is looking to raise Rs 2.10 lakh crore through disinvestment in the current fiscal.

This includes Rs 1.20 lakh crore from Central Public Sector Enterprise (CPSE) stake sale and Rs 90,000 crore from sale of government stake in financial institutions.

Talking about banking reforms, he said the sector needs further expansion and an increase in competition because India's private debt to GDP ratio remains limit to mid 50s.

Stating that in case of other emerging economy, private debt to GDP ratio is well beyond 100 per cent, Kumar said that "so we need to increase private debt and this will happen when our banking sector will expand".

On the Indian agriculture sector, he said the Niti Aayog now is very strongly pushing the programmes for chemical free natural farming which has a potential to reduce cost for agriculture production dramatically and also has very positive impact on the environment.

Kumar said the expansion of natural farming all over the country will make Indian agriculture more competitive and it also promises to have a significant positive impact on farmers' income.

Photograph: Rupak De Chowdhuri/Reuters