India’s economic recovery has continued to trend upwards even as global economic recovery remains hamstrung, the Finance Ministry’s latest economic report has said. The key factors impacting global economic recovery are input cost inflation as well as the continued breakdown of global supply chains.
The festive season saw record high sales of Rs 1.3 lakh crore, according to Confederation of All India Traders (CAIT). As fresh COVID-19 cases have seen a massive dip and by October end over 85 percent of adults had received at least one vaccine dose, with 38 percent of the eligible population being fully vaccinated, the economy is on the path to recovery.
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The report highlighted that even though India has administered 100 crore doses, it would be reckless to stop being cautious now.
The festive season also saw the second-highest level of goods and service tax (GST) collections. Revenue collection is expected to remain in an upside movement as economic activity and tax administration are strengthened.
India’s exports have continued to be a strong part of the recovery story. India’s merchandise exports in October crossed the $30-billion mark for the seventh consecutive month and merchandise imports also rose to pre-pandemic levels in FY2021-22 until October.
But the vehicle segment continues to struggle with supply chain issues. “Total vehicle registrations declined by 5.5 percent with passenger vehicle registrations yet to increase. Protracted global supply disruptions in semiconductor chips have led to increased waiting time for four-wheelers’ buyers,” stated the report.
While retail inflation slipped to 4.4 percent along with food inflation, core inflation remained high at 5.9 percent mostly as a result of the continuous increase in international oil price. Though “responses to RBI’s inflation survey indicate that these concerns are still not embedded into either cost-push or demand-side inflationary expectations,” stated the report.
India’s equity market also remained an attractive source of funding. “Market capitalisation soared to $3.5 trillion in September, 2021, making it surpass France to become the sixth most valuable stock market in the world,” added the report.
“Armed with necessary macro and micro growth drivers, the stage is set for India’s investment cycle to kickstart and catalyse its recovery towards becoming the fastest growing economy in the world!” the report concluded.
(Edited by : Shoma Bhattacharjee)
First Published: IST