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India’s Exponential Growth | Key Signs Revealed

Written by Sneh Vatwani Dt. July 28th, 2022

Manufacturing PMI (Purchasing manager’s Index) :
The IHS Markit India Manufacturing PMI unexpectedly rose to 57.6 in November from 55.9 in October, beating market consensus of 55.1. Output rose sharply and at the fastest rate in nine months while the domestic market was the main source of sales growth.

The IHS Markit India Manufacturing PMI was down to 55.5 in December 2021. Still, the latest reading pointed to robust operating conditions that were elevated by historical standards. Growth of new work and production stayed sharp in spite of losing momentum.

Growth in various Indexes :

  • India’s Index of Industrial Production (IIP) for July 2021 stood at 131.4 against 122.6 for June 2021.
  • Consumer Food Price Index (CFPI) – Combined inflation was 3.11 in August 2021 against 3.96 in July 2021.
  • Consumer Price Index (CPI) – Combined inflation was 5.30 in August 2021 against 5.59 in July 2021.
  • Foreign portfolio investors (FPIs) invested US$ 2.5 billion in India in August 2021.

GST Revenue Collection :
India has reported strong rise in the total revenue collection. Collections stayed above the ₹1 lakh crore despite the covid pandemic.

Further following Government Initiatives have been made to support the economy:

  • By November 1, 2021, India and the United Kingdom hope to begin negotiations on a free trade agreement. The proposed FTA between these two countries is likely to unlock business opportunities and generate jobs. Both sides have renewed their commitment to boost trade in a manner that benefits all.
  • In August 2021, NITI Aayog and Cisco collaborated to encourage women’s entrepreneurship in India.
  • In August 2021, Prime Minister Mr. Narendra Modi announced an initiative to start a national mission to reach the US$ 400 billion merchandise export target by FY22.
  • In August 2021, Prime Minister Mr. Narendra Modi launched digital payment solution, e-RUPI, a contactless and cashless instrument for digital payments.
  • In June 2021, RBI Governor, Mr. Shaktikanta Das announced the policy repo rate unchanged at 4%. He also announced various measures including Rs. 15,000 crore (US$ 2.05 billion) liquidity support to contact-intensive sectors such as tourism and hospitality.
  • In June 2021, Finance Ministers of G-7 countries, including the US, the UK, Japan, Italy, Germany, France and Canada, attained a historic contract on taxing multinational firms as per which the minimum global tax rate would be at least 15%. The move is expected to benefit India to increase foreign direct investments in the country.
  • In June 2021, the Indian government signed a US$ 32 million loan with World Bank for improving healthcare services in Mizoram.
  • In May 2021, the Government of India (GoI) and European Investment Bank (EIB) signed the finance contract for second tranche of EUR 150 million (US$ 182.30 million) for Pune Metro Rail project.
  • According to an official source, as of September 15, 2021, 52 companies have filed applications under the Rs. 5,866 crore (US$ 796.19 million) production-linked incentive scheme for the white goods (air conditioners and LED lights) sector.
  • In May 2021, Union Cabinet has approved the signing of memorandum of understanding (MoU) on migration and mobility partnership between the Government of India, the United Kingdom of Great Britain and Northern Ireland.
  • In April 2021, Minister for Railways and Commerce & Industry and Consumer Affairs, Food & Public Distribution, Mr. Piyush Goyal, launched ‘DGFT Trade Facilitation’ app to provide instant access to exporters/importers anytime and anywhere.
  • In April 2021, Dr. Ahmed Abdul Rahman AlBanna, Ambassador of the UAE to India and Founding Patron of IFIICC, stated that trilateral trade between India, the UAE and Israel is expected to reach US$ 110 billion by 2030.

India is expected to attract investment of around US$ 100 billion in developing the oil and gas infrastructure during 2019-23.

The Government of India is going to increase public health spending to 2.5% of the GDP by 2025.

For implementation of Agriculture Export Policy, Government approved an outlay Rs. 2.068 billion (US$ 29.59 million) for 2019, aimed at doubling farmers income by 2022.

To achieve Expected GDP Growth by 8-8.5%
The Indian Economy requires a very big demand push for growth recovery. The following may give demand push for growth recovery:

  • Release of the three instalments of dearness allowance to the central government employees amounting to around Rs 37,500 crore in the form of expenditure voucher could be considered.
  • A total of 1,737 Central sector projects (including delayed projects) costing Rs 150 crore and above with about Rs-26.71 lakh core anticipated completion cost (425th Flash Report by Ministry of Statistics and Programme Implementation) and those proposed in Budget 2020-’21 should be executed on a fast-track basis.
  • Households steeped into indebtedness due to Covid-19 hospitalisation should be given full relief of the burden.
  • Households that have lost earning member should be provided with a basic income of Rs 5,000 per month.
  • Migrant labours who have lost jobs should be given a basic income of Rs 5,000 per month for six months.
  • Urban micro-entrepreneurs and daily wage earners who have lost their livelihood should be given a basic income of Rs 5,000 per month for four to six months. Similar schemes inducing private consumption could also be thought of.

Written by
Sneh Vatwani
Articled Clerk

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