Prospects for improving health of economy, growth prospects in
next financial year are good.
There have been many good news on the economic front in the country in the last month. In such a situation, it is expected that there may be a large increase in the growth rate in the last quarter of the current financial year. Two vaccines developed by the country’s scientists have triggered a new wave of hope.
The year has historically been full of difficulties for the world’s economy. China, the creator of Kovid-19 and is free to spread it worldwide and has an economy on the path of rapid growth, but the economy of most developing and underdeveloped countries has not returned to track. India did not allow the situation to get out of control by imposing timely lockdowns, yet the economy suffered extensive damage. The GDP growth rate in the current fiscal year is estimated to be minus 7.5, which is minus 7.5 percent, the lowest in the last six decades.
Except for essential goods and services from March to September, production and business of other things remained negligible. Unemployment reached its peak after millions of people were forced to migrate to villages, leaving industrial cities.The central government gave a total relief package of over Rs 29 lakh crore, the economy is now growth oriented. Demand for things such as mobiles, washing machines, refrigerators, ACs, TVs, two-wheelers and cars, computers and laptops, luxury flats, is showing that growth is on the rise, though most of the economy is yet to recover. Recession. Tourism, air traffic and hotel business etc.Etc. are still disrupted due to international restrictions and physical distance and other precautions including masks.
There was a huge change in working
Meanwhile, there has been a drastic change in the functioning. People are working from home instead of office. New jobs are coming up very rarely. Although most of the workers have now returned to the cities, the employment opportunities are less than before. A joint report by the Asian Development Bank and the International Labor Organization states that people aged 15-27 may face economic and social difficulties in the short and long term.
The rate of inflation is 6.8 percent, which has crossed the security limit of six percent, due to which the Reserve Bank is not changing the repo and reserve repo rate, because it can boost inflation. This has created a contradiction in the economy. The loan should be cheaper to encourage domestic investment, but it can fuel inflation by bringing more money in the trend. The Reserve Bank believes that there is no shortage of money in the economy, but the common man does not believe it, this is also an indication of the lack of growth in indigenous investment.
Manufacturing growth rate appreciable
The manufacturing growth rate is commendable. It has continued to grow at a record for the last three months. PMI was 56.4 in early December. It was 53.3 in December last year. It is noteworthy that PMI above 50 indicates development.Companies are increasing stock due to increase in demand. Two-wheeler sales in October 2022-23 were 18 percent higher than the same period of 2022-23. At the end of the festive season, there was a slight decrease in demand for some items, which is natural.
Exports have declined due to the worldwide recession. Exim Bank estimates that excluding crude oil is expected to grow 0.3 percent in October-December. According to a survey, 50 percent of the companies talked about an increase in demand orders, 40 percent considered an increase in orders from abroad. Energy demand has increased since the start of work in factories.Production of some basic industries like coal, crude oil, gas, electricity generation, fertilizer, cement etc. declined which was a concern for the economy. The number of e-way bills, which is mandatory for traffic of more than 50 thousand items, increased from 5.1 crore in January to 6.4 crore in October.
The process of digitization accelerated
Lockdown has accelerated the process of digitization. GST collection since October has been consistently going above Rs 1 lakh crore, which is a clear indication of growth in business. FDI has steadily increased, indicating that foreign investors remained confident of the Indian economy even in the global recession. Foreign imports declined in the meantime and the current account deficit ended.For the first time, many unnecessary items coming from China were also controlled by self-sufficient India campaign.
India’s economy will remain stable
An indicator of the health of the economy is the stock market, which has been on the upswing since early November. The BSE index rose 8,400 points to close at a record high of 48,176 on December 5 in just 44 trading sessions. The prospects of India’s GDP growth in the next financial year are estimated by various financial institutions and rating agencies,they range from 5.4 to 13 percent. It is clear from these estimates that the prospects of development are good, provided the Kovid epidemic is under control in the next few months, with no new form of crisis arising and agriculture yields in the country remain good as in the current financial year. In this context, a UN report also raises hopes that India’s economy will remain stable in the South Asia region in the long term.