Indian Economy is fighting with the inopportune blow from the Coronavirus Pandemic. Observing the devastating economic impact of the hit, experts had anticipated that the sectors relying heavily on people's behavior would take longer than usual to recover. How is the Indian Economy recovering? We provide you the crux of the economic revival across multiple sectors in this blog.
A Press Release by the Ministry of Finance, (dated 23 Jun 2020) - entitled "Increase in Economic Activity-Improvement in Economic Indicators" highlights three sectors that are showing green shoots of economic revival viz. Agriculture, Manufacturing, and Services.
"My view is that one should not be too anxious with forecasts of negative GDP (gross domestic product) growth rates. Most believe that India’s GDP growth, which was slowing down in the pre-COVID era, will contract by about 5% this year. But very will happen to assume no further lengthy and complete lockdowns in future,” - Deepak Parekh, Chairman Housing Development Finance Corporation (HDFC) (at the 43rd AGM).
As per the finance ministry, positive signs were visible across sectors like agricultural procurement, fertilizer sales, energy consumption, freight movement, digital transactions, and forex earnings.
Agriculture Sector Post Lockdown
Major indicators showing signs of recovery in the agriculture sector are:Agriculture Procurement
- On 16th June 2020, wheat procurement from farmers reached a record sum of 382 Lakh Metric Tonnes surpassing the earlier record of 380 LMT reached during 2012-13.
- The procurement of Minor Forest Produces in 16 states broke records with the procurement touching Rs. 80 crores.
- In May 2020, the sale of fertilizers mounted by almost 98 percent year-on-year.
Manufacturing Sector Post Lockdown
- Electricity consumption witnessed continuous improvement.
- Use of petroleum products enhanced by 47% (April to May)
Services Sector Post Lockdown
- India became the world’s second largest manufacturer of Personal Protective Equipment (PPE) within 2 months.
- Railway freight traffic gained by 26% in May over April - indicating an increase in mobility of goods on National Highways.
- Increase in average daily electronic toll collections.
- Increase in total digital Retail financial transactions via NPCI platforms
Related: Decoding government package for MSMEs during Covid 19
Monetary Indicators Showing Economic Recovery
- Private placement of corporate bonds picked up sharply by 94% in May as compared to a contraction of 22% in April.
- Average assets under management (AUM) of mutual funds increased.
- India’s forex reserves continue to provide a crucial cushion to external shocks on the back of higher FDI, portfolio flows, and low oil prices.
- FDI in India recorded an inflow of USD 73.45 billion in FY 2019-20, an increase of 18.5 % over the previous fiscal year.
Post Lockdown Road to Economic Recovery
According to the Government, "the commitment towards structural reforms and supportive social welfare measures" will help the Indian economy get back on track. "The resolve for 'Atmanirbhar Bharat'" will be instrumental in creating a robust Indian economy across sectors.
As India recorded highest ever single day recoveries of 51,706 people on Aug 5, 2020, signs of economic recovery too are on track. Hoping for a brighter and robust economy soon!