oppn parties The Economy: Recovering Fast

News Snippets

  • India's sovereign green bonds were oversubscribed four times as the RBI received 266 bids worth Rs 32892cr agaisnt the target of Rs 8000cr
  • Google tweaks its Android and India app store policy to allow manufacturers and users to choose certain things instead of compulsorily using Google apps after the CCI order and fine for unfairly dominating the market
  • Former US secretary of state calls former Indian external affairs minister Sushma Swaraj a "goofback" and a "hinterland political hack". MEA S Jaishankar slams him
  • Jamia screening of BBC documentary on Gujarat riots cancelled after the university was turned into a fortress and later 13 students were detained by the police
  • Supreme Court grants conditional interim bail for eight weeks to Lakhimpur Kheri accused Ashish Mishra. The bail can be further extended based on his conduct. He was asked to stay outside Delhi-NCR and UP and surrender his passport
  • After the JNU administration tried to thwart the students from screening the BBC documentary on the Gujarat riots and PM Modi, now students of Presidency and Jadavpur universities in Kolkata have decided to screen it 5 times next week
  • While a US research frim Hindenburg says its analysis found the Adani group overleveraged and claimed that its bubble will burst very soon and that sent the price of group companies crashing (Adani companies lost a combined Rs 55000cr), Adani group said the report was 'baseless' and 'malicious'
  • This time Enforcement Directorate arrests TMC spokesperson Saket Gokhale under PMLA for money laundering
  • Padma awards announced on Republic Day: Mulayam Singh Yadav, architect Balkrishna Doshi and ORS pioneer Dilip Mahalanobis get Padma Bibhushan posthumously, Padma Bhushan ius awarded to Kumar Mangalam Birla and 8 others and 91 get Padma Shri
  • Stocks fall big time on Wednesday on F&O expiry, finalncial and banks take big hit: Sensex tumbles 773 points to 60205 and Nifty 226 points to 17892 even as the market volatility meter shoots up by 8.51%
  • World Cup hockey: Germany stun England 4-3 to reach semifinals; Netherlands beat Korea 5-1 to enter last four
  • Australian Open: Sania Mirza and Rohan Bopanna reach the finals
  • Suryakumar Yadav is named ICC Cricketer of the Year 2022 and Renuka Singh gets the ICC Emerging Cricketer of the Year 2022 award
  • BCCI gets a whopping Rs 4670cr in the auctions for the 5 teams in WIPL or as it will be known now, WPL. Adani Sportline gets Ahmedabad for Rs 1289cr while Mumbai Indians get Mumbai for 913cr
  • Calcutta HC overturns the hookah bar ban in Kolkata by saying that it is not an illegal trade
India Commentary Wishes A Happy Republic Day To All Its Readers /////// India Commentary Wishes A Happy Basant Panchami And Saraswati Puja To All Its Readers
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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.