India's economy has shown a remarkable resilience in the last few months, braving the impact of the coronavirus pandemic with lead indicators such as manufacturing PMI and exports returning to growth trajectory, Assocham said on Thursday.
The chamber's Assessment on State of Economy (AASE) report pointed towards a further pick up in the coming months. "Be it India's Purchasing Managers' Index (PMI - Manufacturing) or PMI for Services, robust recovery is visible. The PMI for Manufacturing expanded to 56.8 in September 2020, the highest since January 2012. The PMI for Services expanded for the fifth straight month in September to 49.8 from 41.8 in August," AASE noted.
In other words, according to the outlook measured by the best-tracked global gauge, 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 assessment found.
"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 under the leadership of Prime Minister Narendra Modi, has pressed the accelerator for reforms in labour laws, agriculture, defence production and incentives to domestic manufacturing.
As more and more services reopen and the consumers learn more about dealing with the pandemic, the GST collections are expected to pick up further, the assessment revealed. The country's Goods and Services Tax (GST) collections grew 4 per cent to Rs 95,480 crore in September. The rail freight, yet another critical indicator, showed a 15 per cent growth YoY in September. Similarly, annualised 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 annualised growth at USD 27.4 billion for September.
"As we have been pointing out, there would be a marked improvement in the third and fourth quarter. With the festival season kicking in, the consumer spending has started showing positive signals. 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.