oppn parties The Economy: Recovering Fast

News Snippets

  • Supreme Court sentences Congress leader Navjot Singh Sidhu to one year rigorous imprisonment in the 1988 road rage case
  • Home Minister Amit Shah says rights should not be demanded before fulfilling responsibilities and that universities are no place to wage ideological battles
  • NIA court convicts JKLF chief Yasin Malik in terror funding case after he pleads guilty of all charges
  • A study backed by PM-EAC has recommended universal basic income and urban job guarantee and greater spend on social sector schemes
  • Supreme Court rules that the decisions of the GST Council are not binding on the Centre and the states, leaving the door open for states to levy further taxes
  • After sustained campaign by BJP MP Arjun Singh, the Centre today withdrew the jute price cap order, industry welcomes move
  • Akasa Air might postpone its July launch due to late arrival of aircrafts
  • Metro Cash & Carry decides to sell Indian operations. All major players, including Reliance retail and Amazon, are likely to bid
  • Local and global cues spook the markets on Friday - Sensex crashes 1416 points to 52792 and Nifty by 430 points to 15809
  • IPL: RCB crushes GT by 8 wickets as Virat Kohli returns to form with a well-made half century
  • Nikhat Zareen is world champion in flyweight category. Wins gold at Women's World Championships at Instanbul
  • Supreme Court uses its special powers under Article 124 to release A G Perarivalan, a Rajiv Gandhi assassination convict
  • Indrani Mukherjea, prime accused in the Sheena Bora murder case, gets bail from Supreme Court after 6.5 years in jail
  • Hardik Patel quits Congress, says top leaders distracted by mobile phones and state leadership busy arranging 'chicken sandwiches' for them
  • Anil Baijal resigns as Lieutenant Governor of Delhi citing "personal reasons"
Nikhat Zareen is crowned world champion in the flyweight (52Kg) category at the Women's World Championships in Istanbul /////// Supreme Court sentences Navjot Singh Sidhu to rigorous imprisonment of one year in the road rage case /////// Sunil Jakhar, who quit the Congress a few days ago, joins the BJP
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.