After lockdown, economic indicators are improving, assures government

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– globalbihari bureau

New Delhi:  The Finance Ministry on Tuesday said “early green shoots” of economic revival had emerged in May and June with real activity indicators like electricity and fuel consumption, inter and intra-state movement of goods, retail financial transactions witnessing pick up, after the lockdown period.

Claiming that Agricultural sector, despite lesser GDP contribution in relation to Industry and Services, remained the foundation of the Indian economy and with a forecast of a normal monsoon, should support the rebooting of the Indian Economy.

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The ministry also lauded the “resilience of the Indian manufacturing”, which it claimed was evident from the fact that within a period of 2 months, India became the world’s second largest manufacturer of Personal Protective Equipment (PPE) starting from scratch.

Claiming an overall improvement in economic indicators, the ministry came out with the following sector-wise statement on the issue:

Agriculture

• Procurement of wheat from farmers by Government agencies touched an all-time record figure of 382 Lakh Metric Tonnes (LMT) on 16^th June, 2020 surpassing the earlier record of 381.48 LMT achieved during 2012-13.  42 Lakh farmers were benefited and a total amount of about Rs. 73,500 crore was paid to them towards Minimum Support Price (MSP) for wheat.
• The procurement of Minor Forest Produces (MFP) under the MSP for MFP Scheme in 16 states hit a high with the procurement touching Rs. 79.42 crores.
• As on June 19, farmers had sown 13.13 million hectares of Kharif crops, 39 per cent higher than corresponding period of last year with a big jump in area coverage under Oil seeds, Course Cereals, Pulses and Cotton.
• Fertilizer sales surged by almost 98 per cent year-on-year in May 2020(40.02 lakh tonnes), reflecting a robust agricultural sector.

Manufacturing

• India’s PMI Manufacturing and Services showed lower contraction in May at 30.8 and 12.6 respectively over April (27.4 and 5.4 respectively).
• Electricity consumption saw lower contraction in growth rates from (-) 24 per cent in April to (-) 15.2 per cent in May to (-)12.5 per cent in June (till 21^stJune). In June, electricity consumption has continuously improved from (-)19.8 per cent in the first week to (-)11.2 per cent in the second week to (-)6.2 per cent in third week of June.
• Total assessable value of E-Way bills picked up by a massive 130 per cent in May 2020 (Rs. 8.98 lakh crore) compared to April 2020 (Rs. 3.9 lakh crore), though lower than previous year and pre-lockdown levels. Value of E-Way bills generated between 1^st and 19^th June stood at Rs. 7.7 lakh crore, with 11 days left for the month to complete.
• Consumption of petroleum products, a major indicator reflecting consumption and manufacturing activity in the country increased by 47 per cent from 99,37,000 metric tonnes in April to 1,46,46,000 metric tonnes in May.Consequently, year-on-year contraction in consumption growth of petroleum products was much smaller at (-)23.2 per cent in May against (-)45.7 per cent in April. In June, growth in consumption of petroleum products is expected to be still higher after one month of Unlock 1.0.

Services

• Railway freight traffic improved by 26 per cent in May (8.26 crore tonnes) over April (6.54 crore tonnes), though still lower than previous year levels. The improvement is likely to continue in June in sync with growth in movement of goods on National Highways.
• Average daily electronic toll collectionsincreased from Rs. 8.25 crore in April, 2020 to Rs. 36.84 crore in May, rising more than 4 times.In the first three weeks of June, it has improved furtherto Rs. 49.8 crore.
• Total digital Retail financial transactions via NPCI platforms increased sharply from Rs. 6.71 lakh crore in April, 2020 to Rs. 9.65 lakh crore in May. The trend is expected to continue in June driven by a sustained pick-up in real activity.

Monetary Indicators

• With RBI’s efforts towards ensuring adequate liquidity, private placement of corporate bonds picked up sharply by 94.1 per cent (YoY growth) in May (Rs. 0.84 lakh crore) as compared to a contraction of 22 per cent in April (Rs. 0.54 lakh crore).  June is likely to see a still larger placement as excess liquidity persists in the system.
• Average assets under management (AUM) of mutual funds increased by 3.2 per cent to Rs.24.2 lakh crore in May 2020 from Rs. 23.5 lakh crore in April 2020. Contraction in YoY growth in the indicator also fell from (-)6.9% in April to (-)4.5% in May.
• India’s forex reserves at USD 507.6 billion as on June 12, continued to provide a crucial cushion to external shocks on the back of higher FDI, portfolio flows and low oil prices. FDI in India recorded inflow of USD 73.45 billion in FY 2019-20, an increase of 18.5 per cent over the previous fiscal.

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