oppn parties The Economy: Recovering Fast

News Snippets

  • In a first, the Supreme Court recognizes marital rape, although for the limited purpose of allowing married women the right of abortion up to 24 weeks if they conceived as a result of forced sex by their husbands
  • Air India cuts discounts on base fare to students and senior citizens from 50% to 25%
  • Mallikarjun Kharge and Digvijay Singh are being touted as frontrunners to take on Shashi Tharoor in the elections for the post of Congress president
  • Sonia Gandhi will decide who will be Rajasthan CM if she feels there is a need to change guard after the near-rebellion by MLAs in the state
  • Ashok Gehlot bowed out of the race for being Congress president after meeting Sonia Gandhi
  • India has moved to the 40th spot in the innovation index, up 6 spots from last year
  • DGGI has alleged that top insurance companies, banks and NBFCs has committed a fraud of Rs 800cr by claiming input tax credit without underlying supplies
  • The Centre will borrow Rs 10000cr less than planned earlier due to good revenue collections
  • At $23.9bn, India's current account deficit widened to 2.8% in Q1, the worst in four years
  • Stocks continue to flounder on Thursday: Sensex sheds 188 points to 56409 and Nifty 40 points to 16818
  • The 36th National Games were declared open on Thusrday by PM Modi in front of a record crowd in Motera near Ahmedabad
  • Jasprit Bumrah most likely to miss T20 World Cup due to recurrence of back injury
  • PFI's political wing, the SDPI is on EC radar and action will follow soon if discrepancies are detected
  • Ashok Gehlot to meet Sonia Gandhi today, says all issues will be sorted out soon
  • Referring to the PFI ban, most Muslim organizations ask the government to take similar action against right wings organizations like the RSS, Bajrang Dal, VHP and the like
In a landmark order, Supreme Court rules that all women, married or unmarried, are entitled to safe and legal abortion up to 24 weeks of pregnancy as per the MTP Act
oppn parties
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.