As vaccination in India picks momentum, it is, in turn, making India an epicentre of a vaccination success story. The Indian economy is gearing up to lead the recovery trajectory of the world. With India reporting 0.021 percentages of cases on 23 August 2021, India is all set to bring its workforce back to the office. Recently, the Periodic labour force survey conducted by the Indian government also indicated a fall in the unemployment rate. In June, the output of 8 core sectors had shown an uptick of 8.9 percentages.
The latest in the strings of Indian economic recovery are ICRA report indicating the improvement in major financial as well as non-financial Indicators of the GDP growth. These pointers include high-frequency service and industrial sector indicators. “With the further easing of the state-wise restrictions, especially across the southern states, the roots of the economic recovery deepened in July 2021. Despite a normalizing base, eight of the 15 high-frequency indicators recorded an encouraging improvement in their year-on-year (YoY) growth in July 2021,” Said Aditi Naiyar, the chief economist of the ICRA.
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Moreover, a marked improvement was noticed in 10 of the 13 non-financial indicators on a month-on-month level. The volume in more than half of these 13 non-financial indicators rose both to their pre-COVID level as well as pre-April 2021 levels. It is to be noted that another massive lockdown was imposed in April 2021. The seven indicators in which the volume rose to pre-COVID levels are non-oil merchandise exports, GST e-way bills, electricity generation, CIL’s output, petrol consumption, PV output, and rail freight traffic. “As the states started unlocking, the mobility for retail and recreation posted a sharp improvement from around 60 percent below baseline at end-May 2021 to 23 percent below baseline by end-July 2021 (seven-day moving average),” Nayar said.
The FASTag toll collections rose from 15.5 per cent to 2,980 crores in July 2021. Growth in FASTag is significant because it shows an increase in freight traffic on national highways indicating the rise in demand as well as supply. The improvement in freight traffic can also be gauzed by the fact that petrol sales of state refineries have reached pre-COVID levels while those of diesel have also shown improvement, though they have not reached their pre-COVID level. The year on Year rail freight growth at 14.1 per cent shows another sign of freight traffic standing firm in the wake of Lockdown restrictions.
Moreover, the positive prospect on Indian economy was also visible in increase in the output of Coal India Limited, rise in electricity generation as well as consumption, a boost in vehicle registrations, domestic passenger traffic, etc. although, the Year-on-Year performance of output of passenger vehicles, scooters and motorcycles saw a decline, it was mainly due to unfavourable base effect.
It is to be noted that ICRA is an Indian Independent and professional investment information and professional credit rating agency. The positive outlook indicated in ICRA holds a lot more significance than it actually looks. Moody’s Corporation has a majority 51.86 percentage majority stake in ICRA. A positive outlook from ICRA translates into a positive outlook from Moody’s too. Moody’s ratings are a big driver of foreign investments in countries.
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A positive outlook from Moody’s will drive foreign investments in India, and with Indian Infrastructure building up for its future workload, the future of post-COVID India seems to be better than China.