oppn parties The Economy: Recovering Fast

News Snippets

  • Batteries, chains and screws were among 65 objects found in the stomach of a 14-year-old Hathras boy who died after these objects were removed in a complex surgery at Delhi's Safdarjung Hospital
  • India confirms that 'verification patrolling' is on at Demchok and Depsang in Ladakh after disengagement of troops
  • LeT commander and 2 other terrorists killed in Srinagar in a gunbattle with security forces. 4 security personnel injured too.
  • Man arrested in Nagpur for sending hoax emails to the PMO in order to get his book published
  • Adani Power sets a deadline of November 7 for Bangladesh to clear its dues, failing which the company will stop supplying power to the nation
  • Shubman Gill (90) and Rishabh Pant (60) ensure India get a lead in the final Test after which Ashwin and Jadeja reduce the visitors to 171 for 9 in the second innings
  • Final Test versus New Zealand: Match evenly poised as NZ are 143 ahead with 1 wicket in hand
  • PM Modi said that a historic Diwali will be celebrated in Ayodhya after 500 years with the rebuilding of the Ram Mandir there
  • Priyanka Gandhi, campaigning as the candidate in Wayanad, alleged that the BJP had neglected the constituency
  • UP Police arrested 7 people for selling firearms on WhatsApp, Instagram and Facebook
  • The Election Commission once again slammed the Congress for 'frivolous doubts' on the Haryana election process
  • Government has advised pharma companies to cut prices of cancer drugs as the customes duty has been slashed
  • Bengal tweaks PMAY scheme to make it 'better' than the Central offer
  • PM Modi slams Delhi and Bengal for not rolling out Ayushman Bharat in their states. TMC rebuts the charges and says the Bengal Swasthya Sathi scheme is better than the Central scheme
  • iPhone exports from India surged 33% in the period April to September this year
PM Modi 'strongly condemns' on Hindu temple in Canada while MEA expresses concern over safety of Indians
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The Economy: Recovering Fast

By Linus Garg
First publised on 2021-11-02 07:17:12

About the Author

Sunil Garodia Linus tackles things head-on. He takes sides in his analysis and it fits excellently with our editorial policy. No 'maybe's' and 'allegedly' for him, only things in black and white.

The green shoots visible in the Indian economy for the last few months have now taken stronger roots backed by the festival season. Almost all indicators have shown a rise as demand picks up and people start to travel. First off, the GST collections in October were an impressive Rs 1.3 lakh crore, the second highest ever. This showed that the demand in the festive season was returning back to normal. Additionally, this was the fourth straight month when GST collections crossed the 1 lakh crore mark.

Then, manufacturing activity grew fastest in 8 months in October. The Purchase Manager's Index (PMI) was 55.9, which means it was in the expansion mode, again the fourth straight month when this happened. The PMI was 53.7 in September and the significant rise in October points to two things - one that old stocks were liquidated in the festive season and firms started input purchase in anticipation of further rise in demand in the coming months.

Exports also rose to $35.5bn, up 43.2% from the $24.9bn posted in October 2020 and more significantly, up 35.2% from the $26.23bn posted in the pre-Covid month of October 2019. The rise in exports was fuelled by the excellent performance of the petroleum products, engineering goods, gems and jewellery and organic and inorganic sectors. Imports also increased by to $55.4bn, up 62.5% from the figure posted in October 2020.

Demand for petrol and diesel is also increasing as more people are traveling. On Sunday, India recorded the highest number of flyers since March 2020. In October, diesel sales topped the pre-Covid level for the first time in one year. Petrol sales were up by 8% from 2019 and 4% from 2020. Jet fuel consumption also showed an increase but was yet to touch the pre-Covid levels. Although the fuel figures are misleading as prices have increased enormously and the rise is not by volume.

All this along with a galloping stock market and enormous funds being poured by venture capitalists in startups have created a positive atmosphere for business in India. The economy is looking up after the depression and gloom of the last 18 months. The extended lockdowns forced by the pandemic have given way to resumption of economic activity with a vengeance as more people are getting vaccinated and the fears of the third wave have receded. The only discordant note that is being struck is that bank credit off-take for industry is not growing as it should. In fact, latest figures show that for the first time, personal loans have beaten the overall credit provided by banks to industry. This has negative implication for wealth creation.