India is on a path to swift recovery due to strategic reforms and the rapid vaccination drive that have enabled the economy to ‘navigate the ravaging waves’ of the COVID-19 pandemic, according to the finance ministry's monthly economic review for September.  The external sector continues to offer bright prospects for India's growth revival as merchandise exports crossed $30-billion for the sixth consecutive month in fiscal 2021-22, it said.

Sustained and robust growth in agriculture, sharp rebound in manufacturing and industry, resumption of services activity and buoyant revenues suggest that the economy is progressing well, the review said.

"India is well-placed on the path to swift recovery with growth impulses visibly transmitted to all sectors of the economy... Strategic reforms undertaken so far along with new milestones in vaccination drive have enabled the economy to navigate the ravaging waves of the COVID-19 pandemic," it said.

With merchandise trade deficit also rising in September, there is clear evidence of consumption and investment demand is also picking up in India, it said, adding, the external debt-to-gross domestic product (GDP) ratio continues to remain comfortable, declining to 20.2 per cent at the end-June 2021, from 21.1 per cent at the end-March 2021.

With restoration of supply chains, improved mobility, and softening food inflation, consumer price index (CPI) inflation retreated to a four month-low of 5.3 per cent in August 2021, clearly demonstrating that inflationary tendencies are pandemic-induced and transitory.

However, volatile prices in the international crude oil markets and upward-bound prices of edible oils and metal products may continue to pose concerns, it said.

Latest trends in high-frequency economic indicators in August and September further indicate a broad-based recovery evidenced in sustained improvement in power consumption, rail freight activity, e-way bills, robust goods and services tax collections, highway toll collections posting a 21-month high, sequential uptick in air freight and passenger traffic, and quantum leap in digital transactions.