The coronavirus pandemic created the year 2020 unforgettable as it shook all the pillars of the economy and left pretty much all sectors in despair, at least through the early months. Now, as the eventful year is coming to an finish, it is exciting to appear back at distinctive financial regions as to how these performed. Undoubtedly, the agriculture sector held the baton of financial development even though other sectors have been attempting to touch the breakeven. Even now, the farm sector is anticipated to substantially assistance in the financial revival procedure. The production development in pulses, oilseeds, cotton, and sugarcane in this kharif season would be a help element for sustaining demand, in particular in the post-festival season as the cash earned by way of sale of crop which ends by December can be spent in early 2021, stated a report by Care Ratings.
Industrial production
On the other hand, the industrial production had pretty much come to a standstill in the months of April and May. IIP had contracted by 57.3 per cent in April, which steadily recovered to .2 per cent in September and 3.6 per cent in October. However, it is doubtful if the development momentum will sustain post-December when the pent-up demand in consumption could finish.
Corporate functionality
Amid strict travel restrictions and diminished demand, the corporate functionality was also lacklustre. Nearly 1,435 organizations in Q1 showed a 34.5 per cent decline in sales and 28 per cent fall in operating profit, showed Care Ratings’ study. However, right after a gradual recovery, 1,686 organizations reported 7.5 per cent fall in net sales but an enhance of 5.2 per cent in operating profit in Q2. This alter in trend was mostly due to price-cutting by organizations to defend profit as turnover fell.
The rating agency estimated that there are restricted indicators of recovery in the true sector with some industries major. But even right here, there is a bit of apprehension on whether or not the buoyancy witnessed through the festival season can be maintained. The exact same is also reflected in the corporate functionality which has not been incredibly convincing in the Q2 period. In this case, investment revival appears difficult.