The Economy Is On Track For 7% Growth
By A Special Correspondent
First publised on 2022-11-02 07:58:22
About the Author
The news on
the economic front is reassuring and suggests that growth will be on track at
around 7%. GST collections in October were Rs 1,51,718 lakh crore, the second
highest ever, although growth in collection, at 16.8% Y-O-Y, has slowed down
due to normalizing base. But with robust e-way bill generation due to the
festive season in October, collections are expected to be high in November too.
The
manufacturing sector also showed healthy uptick in activity. The Purchase
Manager's Index, which stood at 55.1 in September, jumped to 55.3 in October as
new orders filled the books. Job creation was also at its fastest pace in
nearly three years. These are good signs as growth in manufacturing and
agriculture related activities, along with construction and services can reduce
unemployment rapidly.
Other
indicators were also positive. Railway freight earning rose 17% and passenger
bookings were also healthy. Fuel sales recorded the sharpest volume growth at
12% since June, mainly due to the festive season. Car sales were also robust
but two-wheeler sales were subdued. UPI payments rose by 7.7% in October. The
stock exchanges also reflected this with the Sensex reclaiming 61000 after 10
months on November 1.
But September and October, being festive
months, always see a sharp rise in demand for goods and services. Yet, the
Y-O-Y growth is promising. Economic activity is picking up fast and with 5 months
still left in this financial year, most targets, including the fiscal deficit
target, are likely to be met. Government finances are healthy despite a huge
shortfall in divestment due to rising direct tax collections. But food and
subsidizer subsidies are taking an increasing toll. However, if crude prices
remain stable, if exports do not suffer due to feared recession in developed
countries and if the Ukraine conflict does not escalate further throwing supply
chains out of gear once more, India can hope to achieve excellent GDP growth
this financial year.
