The finance ministry has asserted that “green shoots” have started to emerge in the economy, even as it acknowledges that the International Monetary Fund has pegged India's FY21 growth at minus 4.5%.
The finance ministry has asserted that “green shoots” have started to emerge in the economy, even as it acknowledges that the International Monetary Fund has pegged India’s FY21 growth at minus 4.5%. Highlighting several data points in its monthly macro-economic report to buttress its assumption of a nascent recovery, the department of economic affairs has said total digital retail financial transactions via NPCI platforms rose sharply from Rs 6.71 lakh crore in April to Rs 9.65 lakh crore in May. Consumption of petroleum products jumped 47% from 99.37 lakh tonnes in April to 146.46 lakh tonnes in May. Kharif sowing climbed 104.3% year on year, with Rabi procurement in full flow with respect to oilseeds, pulses and wheat due to a bumper harvest.
The report says within just two months, India, starting from scratch, has become the world’s second largest manufacturer of personal protective equipment (PPE). Electricity consumption saw lower y-o-y contraction from minus 24% in April to minus 15.2% in May to minus 11.3% in June (until June 28). Total assessable value of e-way bills picked up by a massive 130% in May, compared with April, tracking a surge in inter and intra-state road-based movement of tradable goods.
In June, it further rose by 34% over the preceding month. Sustaining the momentum in economic activity, railway freight traffic improved by 26% in May (8.26 crore tonnes) over April 2020 (6.54 crore tonnes). Average daily electronic toll collections, yet another indicator of freight movement by road, increased from Rs 8.25 crore in April to Rs 36.84 crore in May and further to Rs 50.9 crore in June (till June 28), the report has highlighted.
It says Purchasing Managers Index (Manufacturing) has also consistently improved from 27.4 in April to 30.8 in May and further to 47.2 in June. In support, India’s forex reserves at $505.6 billion as on June 19, continue to provide a crucial cushion to external shocks on the back of higher FDI, portfolio flows and low oil prices. This recovery is also evident in the Goods & Services Tax (GST) collections for June 2020 that clocked Rs 90,917 crore at gross levels, 46% higher than May and 181% over April. “These green shoots have a conducive policy environment to grow further and nudge the economy early on the path of economic recovery and growth,” it said.