The Indian economy is likely to do better than the projection of an 8 percent shrinkage in the current FY as economic activity gathers momentum with mild stiffening of pandemic curve and the rollout of vaccines, the finance ministry said on Friday.

The Department of Economic Affairs in its monthly report said the recovery of global output has slowed following the re-imposition of lockdowns in advanced countries amid renewed COVID-19 waves and its emerging variants. However, economic activity in India has gathered pace with mild stiffening of the COVID-19 curve, failing to deter a steady uptick in consumer sentiment, which has been bolstered by the inoculation drive.

 "Positive GDP growth in Q3 of FY21 - for the first time since the onset of the pandemic - adds to the positive sentiment as the economy is set to close the year with activity levels higher than measured in the second advance estimates of GDP," the report said. It said the RBI’s industrial outlook survey (IOS) conducted in Q3 of FY21 has also re-affirmed this optimism, with respondents indicating a strengthening of production, order books and employment during the third quarter, driven by easing of lockdowns, reopening of businesses and improvement in the availability of finance from banks and internal sources. GDP growth is expected to be in positive territory in the second half of 2020-21, the report noted.

Canadian economy worst on record since 1961, showing on record in 2020

Credit flows to large industries falls, inflow rises in services

Economy of country crumbles due to COVID-19, fiscal deficit recorded as 12.34 lakh crore