on gdp revealed that there still exists significant gap in both private consumption and investment, relative to their pre - pandemic levels in 2019 – 20. so, while the economy is picking up pace, it is yet to cover a lot of ground before it gets broad - based and entrenched. this points to the need for sustained impetus so that growth could return to, or better still, exceed the pre - pandemic trend. 4. i firmly believe that india has the potential to grow at a reasonably high pace in the postpandemic scenario. several factors are stacked in india ’ s favour. first, india as an emerging market and developing economy has significant potential to catch up with the rest of the world supported by favourable demographics, improving skill base and strong domestic demand. second, the government is providing necessary support – especially through capital expenditure and reforms in various sectors like infrastructure, manufacturing and telecom, apart from other institutional changes to boost productivity, ease supply constraints and improve business environment. third, the pandemic has opened new opportunities of growth in digital and green technology and also on account of resetting of global supply chains that could be advantageous to india. fourth, exports have been a bright spot during the recent months and are likely to benefit further from global economic recovery. in the presence of such enabling conditions and supportive policies, i have no doubt that we have a unique opportunity to step up growth as we emerge from the pandemic. let me dwell further on some of these issues. private consumption – backbone of growth 1 / 5 bis central bankers'speeches 5. contributing the largest share of aggregate demand ( around 56 per cent of gdp ), private consumption is critical for inclusive, durable and balanced growth of our country. daily wage earners and workers at the lower rungs of the society have incurred significant losses of income and employment during the pandemic that will take time to repair. the international monetary fund ( imf ) estimates that less than 70 per cent of emerging economies will be able to achieve 2019 employment levels even by end of 2022. in india, demand for work under mgnrega1 remains about 10 million higher than pre - covid levels, suggesting that the recovery in informal sector has still to cover a distance. a minimum tenure of contract for semi - skilled labour, especially in infrastructure sector and linked to duration of projects may perhaps induce employment certainty and consumption. small businesses have also been hit harder and would require support to recover and achieve their full

employment potential. 6. there are signs that consumption demand triggered by the festive season is making a strong comeback. this would encourage firms to expand capacity and boost employment and investment amidst congenial financial conditions. the recent cut in excise duty on petrol and diesel by the central government and in value - added tax ( vat ) by several state governments will augment purchasing power of people, which in turn, will create space for additional consumption. are we at the cusp of a virtuous feedback loop where increased demand impulses will move in lockstep with commensurate supply response and ensure sustained growth of the economy? there are reasons to be optimistic on this front. reviving investment 7. reinvigorating private investment is crucial to realise india ’ s growth potential. various policy measures have been taken to support investment. these include cut in corporate taxes, taxation reforms, introduction of performance linked incentive scheme for 13 major sectors, enhanced focus on infrastructure development and asset monetization by the government, initiatives by the government under the atma nirbhar programme and proactive liquidity measures by the rbi. encouragingly, some improvement in investment activity has been observed in the recent period. leading indicators of investment like production and import of capital goods are higher than prepandemic level in september 2021. early results of firms in q2 : 2021 – 22 suggest robust sales and resilient profitability despite input cost pressures. such trends could provide impetus to capacity expansion by the corporate sector in the coming quarters. 8. the pandemic has catalysed far reaching changes in the systems of production, management and governance. the crisis underscored that technology could bridge the resource gap to a large extent and is a key enabler of inclusive growth. emerging technologies such as artificial intelligence, robotics, the internet of things, autonomous vehicles, 3 - d printing, nanotechnology, biotechnology, energy storage and developments in material science have touched all aspects of our daily lives. the future belongs to data - driven smart manufacturing and businesses need to gear up to make the right investments sooner than later. investment in knowledge and skill upgradation holds the key to transforming the manufacturing sector. close coordination between industry and the education system is required to revolutionise the industrial sector. overall, the right mix of investment in physical and human capital can usher in an era of sustained growth. 9. the investment outlook is bolstered by the entry of next generation firms, or the start