Context: Despite the setback on account of the Covid-19 pandemic, Prime Minister Narendra Modi is hopeful that India can still achieve the $5 trillion economy target by 2024. In an interview to the Economic Times, PM Modi said India is on its way towards an economic recovery as shown by 5 indicators — record production and procurement in agriculture, record FDI inflows, demand resurgence as shown by growth in auto and tractor sales, improvement in manufacturing and addition to the Employees’ Provident Fund Organisation (EPFO) subscriber base, showing an improvement in the job market. On being questioned about the Goods and Services Tax (GST) coming under considerable stress due to the COVID-19 pandemic, PM Narendra Modi said the fight against COVID-19 also got strengthened because of this approach. The PM went on to add the prime minister said this is by all accounts an extraordinary year. Most assumptions and calculations did not take into account a once-in-a-century pandemic. In this edition of The Big Picture we will analyse India’s path to recovery
Key 5 indicators which show India is on path of economic recovery are: 
Record production and procurement in agriculture

• The central pool had 73.85 million tonnes of food grains on 2nd April, 2020. This is not only the highest-ever stock available but also over 300% of the strategic and operation reserve norm of 21.04 million tonnes. This year’s kharif crop production is also estimated to be record-high.
• Agriculture performed pretty well with positive growth in the first quarter and it showed record consumption and production. 
• The agricultural reforms reflect the mindset of new India which believes in free markets, trade, openness, and globalization. It is a shift from the old mindset of government interference. 

Record FDI inflows

• During April to August, 2020, total FDI inflow of US$ 35.73 billion is received. It is the highest ever for first 5 months of a financial year and 13% higher as compared to first five months of 2019-20 (US$ 31.60 billion).
• FDI equity inflow received during F.Y. 2020-21 (April to August, 2020) is US$ 27.10 billion. It is also the highest ever for first 5 months of a financial year and 16% more compared to first five months of 2019-20 (US$ 23.35 billion).
• High FDI inflows between April and August - $36 billion - 13% higher than last year in the same period - increase in enrollment of EPFO - an indicator of growth and demand. 
• DBT, Aadhar, Digital India has come to the rescue to not only distribute aid but also monitor and implement government policies. 

Demand resurgence as shown by growth in auto and tractor sales

• Although Commercial vehicle sales lag as coronavirus outbreak pulls down economy but Tractor sales surge in June, buoyed by positive farm sentiment.

Improvement in Employees’ Provident Fund Organisation (EPFO) subscriber base

• According to the provisional payroll data published by the EPFO, the subscriber base of EPFO increased by around 8.47 lakh members during the first quarter. 
• According to the EPFO, new subscribers joining has increased roughly by 64% from 3.03 lakh in May to 4.98 lakh in June. In addition, the exits from the EPFO subscriber base declined by nearly 33% from 4.45 lakh in May to 2.96 lakh in June. 

Improvement in the job market

• The Indian job market has seen a tumultuous few months amid the Covid-19 crisis with huge job losses and soaring unemployment. But that is just the overall story. For one specific segment, the threat seems to be disproportionately bigger: white-collar jobs are front-row in the firing line.
• Around 41 lakh of India’s youth has lost jobs because of the pandemic while employment prospects have gotten severely challenged in Asia and the Pacific, according to a joint report by the Internation.
• "Prioritizing youth employment in the Covid-19 recovery process will improve Asia and the Pacific's future prospects for inclusive and sustainable growth, demographic transition and social stability.

Challenges with increasing Investments: 

• Uncertain economic prospects restrict bankers to lend further despite measures taken by government & RBI. A higher rate of investments is essential for sustainable economic growth. 
• Increasing levels of debt during this deteriorating economic scenario along with rating downgrades for industries are likely to aggravate existing problems.

Challenges with increasing Consumption

• Industry-wide job/pay-cuts with a growing sense of uncertainty over the future may limit spending to non-discretionary items and force people towards precautionary savings.
• Estimates suggest that PFCE will grow at its slowest pace in 15 years.

Challenges with increasing exports

• Disrupted global trade due to heightened trade tensions between the US and China, especially in the wake of pandemic. 
• Global trade witnessed its steepest decline since 2009, falling by -4.3 per cent in March over the previous year, with only downside risks from hereon.
• India’s limited share in global trade along with a battered domestic and global outlook provides little room for exports to contribute towards growth.

Solution to revive economy 

• Infrastructure has strong links to growth and with both supply and demand-side features that help generate employment and long-term assets
• 1 per cent of GDP spend on infrastructure can boost real growth by 2 per cent while creating 1.3 million direct jobs
• Front-loading key projects with greater visibility from the recently announced National Infrastructure Pipeline (NIP) could aid in a quicker recovery.
• 60% of the production and manufacturing were in a standstill from March to May - a huge dent to the economy. 
• Human capital is extremely critical on our path to becoming a $5 trillion economy. 
• The new farm bills, new education policy and the labour reforms - they are all building blocks that will eventually get us there to the 5 trillion dollar mark. We need to acknowledge the biggest threat faced by humanity today - climate change and biodiversity loss and we need to orient our economy to become a low waste economy and increase our resource efficiency (less input, more output).
• 70% infrastructure is yet to be built in India - if we send out the right signal, we can bring in huge investments (ESG funds). It's not about retrofitting old systems, it's about building new systems. 
• With the advent of the 4th industrial revolution, technology drives the modern economic growth rate so we need to realize the full meaning of co-operative federalism by focusing on not just the Centre and the States but also invest heavily in the urban technology centres (3rd tier of governance). 
• 40% vacancies in the High Courts, 125 police officers for every 1 lakh people (UN Recommendation: 222 police officers) -  there is a need to augment the state capacity. 

Road Ahead

• India is moving toward 5 trillion economy, but due to lock down we off track right now, we need some reform to do, be on right tack to achieve our goal, reform need in banking sector, agriculture, msme,  EPFO,  FDI, education sector,  we need to invest more in human capital rather than any thing else. india is one  the emerging fastest-growing economy in the world,  govt  has to  increase investment in urban centre. if we want green shoot in our economy need reform right now.
• We have certainly sees the green shoots in the economy, and signs and indicators are positive. The increasing cases of Covid-19 around the world are serious concern but we seem to be insolated to some extent. Due to rural demand and Atmanirbhar Bharat we can reach our goal of being a $5 trillion economy by 2024 but a lot has to be done between now then. We need to have proper regulation, also underetake large scale reforms and create a conducive ecosystem. What we need, is better implementation of govt. schemes better delivery mechanism system and also we need to develop Human capital and infrastructure.