India Witnessing V-Shaped Economic Recovery
As per Finance Ministry, the country is witnessing a V-shaped economic recovery and attributed the steep 23.9 per cent contraction of the economy in the June quarter to "stringent lockdown" that was put in place to curb spreading of coronavirus infections. Among the major economies, India witnessed the steepest decline in the GDP growth in the April-June quarter following the outbreak of the coronavirus pandemic. "The higher contraction has resulted from the stringent lockdown that India enforced in the April-June quarter. India enforced the most stringent lockdown as reflected in the Government Response Stringency Index developed by Oxford University," the ministry said in its Monthly Economic Review for August. The indicators are auto sales, tractor sales, fertiliser sales, railway freight traffic, steel consumption and production, cement production, power consumption, e-way bills, GST revenue collection, daily toll collections on highways, retail financial transactions, manufacturing PMI, performance of core industries, capital inflows and exports, it added. India's manufacturing Purchasing Managers' Index (PMI) at 52.2 moved into the expansionary zone in August for the first time since the lockdown, presenting much required recovery prospects for the manufacturing sector, it added. Since May, agriculture has persistently been the brightest spot in the revival of growth, the report said, adding that industrial production is showing definite signs of recovery with year-on-year growth in eight core industries output showing a smaller contraction in July than in June. On the back of robust FDI and FPI inflows and savings from tepid imports, forex reserves, as on August 21, have risen to an all-time high of USD 537.5 billion. These are capable of financing more than 13 months of imports, should the need arise from a surge in real sector activity, the report said. US economy contracted by 9.1 per cent while UK and France witnessed a contraction of 21.7 per cent and 18.9 per cent, respectively. Spain, Italy and Germany saw their economies contract 22.1 per cent, 17.7 per cent and 11.3 per cent, respectively, in the June quarter, as per the report.
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