oppn parties The Economy: Recovering Fast

News Snippets

  • For the first time ever, Mukesh Ambani buys a 29% stake in Gautam Adani's Mahan Energen, a subsidiary of Adani Power to source 500MW of electricity from the company's power plant in MP
  • Stocks continue to rise on Thursday - Sensex gains 639 points to 73635 and Nifty 203 points to 22326
  • Golf - Indian Open: 3 Indians at tied 14th as Joost Luiten takes the lead with a wonderful 7-under 65
  • IPL: RR beat DC by 12 runs as Riyan Parag (84 off just 45 balls) shines
  • SP drops two candidates owing allegiance to Azam Khan from Rampur and Moradabad
  • In Assam, a controversy erupted after a picture of UPPL leader Benjamin Basumatary, lying on a stack of Rs 500 notes circulated on social media. UPPL is an ally of the BJP
  • AAP's Jalandhar-West MP Sushil Kumar Rinku joins the BJP. He was the only AAP Lok Sabha MP
  • Supreme Court dismisses Centre's plea to review its 2023 verdict in the PMLA case
  • Close save for passengers as they remain unhurt after the wings of two planes graze at Kolkata airport. Pilots derostered and inquiry ordered by DGCA
  • Bengal BJP leader Dilip Ghosh gets notice from the EC as well as the BJP for making ugly remarks about Mamata Banerjee's parentage
  • Sadanand Vasanth Date, who faught terrorists in the 26/11 attack and was awarded the Preisent's Police medal, has been appointed the head of the NIA
  • Centre will borrow Rs 7.5L cr in the first six months of FY25, nearly 50% of the target for the full year
  • 25 stocks, including SBI, will see same day trade settlements from today in the world's fastest settlement mode in both BSE and NSE
  • Stocks recover smartly on Wednesday: Sensex rises 526 points to 72996 and Nifty 118 points to 22123
  • Tennis: Rohan Bopanna-Matthew Ebden reached the semifinals of the Miami Open
Delhi Lt Governor Vinai Kumar Saxena says government cannot be run from jail, hints at President's Rule in the capital ////// In a dangerous incident, the wings of two planes grazed while taxiing on the runway at Kolkata airport, all passengers were safe but DGCA ordered an inquiry and the pilots were derostered
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.