Do you agree that the Indian economy has recently experienced V-shaped recovery? Give reasons in support of your answer.

A V-shaped recovery denotes a sharp economic contraction followed by an equally sharp rebound. India's economy, which contracted by about 5.8% in FY21 during the COVID-19 shock, rebounded strongly to grow around 9% in FY22, lending substantial support to the V-shaped claim.

Evidence supporting a V-shaped recovery

• Real GDP recouped and surpassed pre-pandemic levels within a few quarters.
• High-frequency indicators, GST collections crossing record highs, rising e-way bills, PMI in expansion, and buoyant exports and tax revenues, confirmed the rebound.
• Rapid vaccination, pent-up demand and policy support (Atmanirbhar packages, liquidity easing) drove the bounce.

Qualifications

• Part of the FY22 rebound reflected a low-base effect after the deep contraction.
• The recovery was uneven, a K-shaped pattern, with the formal sector recovering faster than informal enterprises, MSMEs and contact-intensive services.
• Employment, especially informal, and household consumption lagged the headline recovery.

On balance, the aggregate data support a V-shaped recovery, but its unevenness means the priority must be broad-based, job-rich and inclusive growth to make the rebound durable.