The economy has witnessed a “V-shaped recovery” due to the fact the June quarter debacle and is now riding against the Covid wave on the back of an efficient management of the pandemic, the finance ministry claimed on Tuesday, exuding self-confidence in the strength and durability of the rebound. “The effective management of the Covid-19 spread despite the festive season and the onset of winter season, combined with sustained improvement in high-frequency indicators and V-shaped recovery along with easing of lockdown restrictions, distinguish Indian economy as one riding against the Covid-wave,” the division of financial affairs stated in its report on the economy
for December.
Non-meals credit development picked up strongly to touch 9.4% as of December 18, compared with 5.9% a month prior to, the report stated. The development is attributable to a “liquidity booster” and enhanced disbursement below the `3 lakh crore emergency credit line assure scheme. After a record slide of 23.9% in the June quarter, the year-on-year contraction in actual GDP narrowed to 7.5% in the second quarter of this fiscal. This represented a 23% quarter-on-quarter surge in GDP development, the finance ministry had lately stated, terming it a “V-shaped recovery”.
The most up-to-date report stated agriculture remains the vibrant spot of the Indian economy, with healthful y-o-y development of 2.9% in rabi sowing, accelerating tractor sales, and reservoirs’ live storage at 122% of decadal typical. Combined with a rise in minimum assistance costs accompanied by “record procurement”, and accelerated wage employment generation by means of MGNREGS, the brightening rabi prospects bode nicely for the rural sector.
“This rise in rural incomes is mirrored in the healthy, though moderated, sales in passenger vehicles, two- and three-wheelers and tractor, and a rebound in vehicle registrations for the first time after March 2020,” the report stated.
Globally, the approval of Covid-19 vaccine and initiation of inocculation drives in a variety of nations lend fresh optimism on each well being and financial fronts regardless of a continuing surge in worldwide situations and the prospective challenge of a mutant strain.
A sustained spurt in industrial and industrial activity was additional corroborated by continued development in manufacturing PMI, energy demand, persistent improvement in E-way bills generated and highway toll collection increasing above pre-Covid levels. Monthly GST collections attained their record levels of Rs 1.15 lakh crore in December.
Meanwhile, inflows of foreign direct investments in the April-October period stood at a record $46.8 billion, up 11.3% from a year prior to. India’s market place capitalisation hit $2.5 trillion on December 31 final year, pushing it to the eighth position globally. India’s foreign exchange reserves hit a new higher of $580.8 billion as of December 25, which would cover more than 16 months of imports.
Similarly, the liquidity predicament remains comfy as accumulation of dollars along with development of currency in circulation has enhanced liquidity in the banking program regardless of the typical each day net absorptions by RBI obtaining risen from November to December. The spread in between corporate bond yields and the benchmark G-secs yields has been narrowing in current months, signalling enhanced danger perception of corporate bonds.
The report highlighted that India has succeeded in bending the Covid curve till now, with minimizing weekly or each day infections, increasing recovery price (now at about 95%) and a single of the world’s lowest case fatality prices. The active caseload has dropped beneath 2.5 lakh, putting India at the 10th position (in quantity of active situations). This is coupled by sustained numbers of tests-per-million, with cumulative test positivity price beneath the World Health Organization’s norm of 8%, it stated.