Braving the unprecedented global health crisis, the Indian economy has shown a remarkable resilience in the last few months, with lead indicators like manufacturing purchasing managers’ index (PMI), exports, rail freight and energy consumption returning to a clear growth trajectory with strong signals of further improvement, according to a fresh assessment of India’s economy by the Associated Chambers of Commerce and Industry of India (ASSOCHAM).
Whether it is PMI for manufacturing or services, robust recovery is visible. The PMI for manufacturing expanded to 56.8 in September 2020, the highest since January 2012, whereas the PMI for services expanded for the fifth straight month in September to 49.8 from 41.8 in August.
In other words, about 57 per cent of purchase managers for manufacturing and about 50 per cent for services expect the two vital pillars of the economy to expand, the industry chamber’s ‘Assessment on State of Economy’ (AASE) noted.
Agriculture, the third and the most crucial pillar of the economy, had kept the banner high, ensuring that the country had enough food security to feed its 1.3 billion people. The latest trade data shows how rice exports jumped by a massive 92 per cent in September, ASSCHAM said in a press release.
Likewise, the chamber’s assessment points towards a further pick up in the coming months.
“As a nation, we are giving a solid fight to Covid-19 pandemic. With the unlocking of the economy almost complete, people are returning to work, wearing masks and maintaining social distancing. However, a continuous campaign by the Centre, states and the local Governments would be required to reinforce these habits further,” ASSOCHAM secretary general Deepak Sood said.
He also stated that undaunted by the health emergency, the government has pressed the accelerator for reforms in labour laws, agriculture, defence production and incentives to domestic manufacturing.
The rail freight, yet another critical indicator, showed a 15 per cent growth year on year in September. Similarly, annualized power consumption was up 4.6 per cent for the month at 113.5 billion units. Exports too have returned to the positive territory, logging in 5.27 per cent annualized growth at $27.4 billion for September.
“A cautious optimism should soon replace the entire cash conservation mind-set,” Sood said, adding once the vaccine is in place, the optimism would be pronounced.
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