Strategic reforms and a rapid vaccination drive has put the country on the road to recovery by allowing the economy to navigate the ravaging waves of the Covid-19 pandemic according to the Ministry of Finance's monthly economic review.

The September review concluded that the economy is progressing well, citing sustained and robust growth in agriculture, a sharp rebound in manufacturing and industry, the resumption of services activity, and buoyant revenues.

The external sector continues to be a bright spot for India's recovery, with merchandise exports breaking the $30 billion barrier for the sixth month in a row in the fiscal year 2021-22.

With the merchandise trade deficit rising in September, there is clear evidence that India's consumption and investment demand is picking up, as well as the external debt-to-GDP ratio remaining comfortable, falling to 20.2% at the end of June 2021 from 21.1% at the end of March 2021.

The rate of growth of bank credit was 6.7% YoY in the fortnight ending September 10, 2021, compared to 5.3% in the previous year's corresponding period, according to the report, in line with growth impulses seen across the economy.

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

Volatile crude oil prices on the international market, as well as upward-bound prices for edible oils and metals, may continue to be a source of concern.

G-Sec yields were also stable in September 2021, thanks to a comfortable level of systemic liquidity and an easing of inflationary pressure. In comparison to August, the 10 year yield remained at 6.2%.

In August and September, high-frequency economic indicators showed continued improvement in power consumption, rail freight activity, e-way bills, robust GST collections, highway toll collections reaching a 21-month high, sequential increases in air freight and passenger traffic, and a quantum leap in digital transactions, indicating a broad-based recovery.

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