Finance Minister Nirmala Sitharaman on Tuesday listed seven indicators of green shoots in the Indian economy. Replying to the debate on Union Budget 2020 in Lok Sabha, FM Sitharaman enumerated the seven early signs of revival in the economy namely- Global sentiment, NIP, IIP, PMI manufacturing index, forex reserves, gross GST collection and secondary markets.
The finance minister further told the Lok Sabha that despite facing a downturn in economic activity in the past six quarters, the economy will improve as the seven green shoots are manifesting positive indications.
FM Sitharaman stated that the Indian economy increased from $2 trillion in FY15 to $2.7 trillion in FY19 and $2.9 trillion in FY20.
These are the seven indicators FM Sitharaman cited:
1. Global sentiment: Finance Minister said that the global sentiment was in favour of India as foreign investors continued to show confidence in India. India attracted a net FDI of $24.4 billion in April-November period of FY20, Sitharaman said. "Even between April and November of FY20, the FDI stood at $24.4 billion as compared to $21.2 billion in the same period (April and November) of the previous year," she said.
2. Net FPI: She further said that the Net FPI between April to November of FY20 was positive at $12.6 billion as against $8.7 billion between April-November period of FY19. The finance minister added that the announcement of NIP may further increase the flow of FDI into the country even for Brownfield projects. "And therefore the green shoots need to be identified and recognised and we can all wait to see its impact on the economy," she added.
3. Index of Industrial Production (IIP): FM Sitharaman said that the Industrial activity as indicated by the IIP is on a rebound. "The IIP in November 2019 has registered a positive growth of 1.8% as compared to a contraction of 3.4% in October 2019 and 4.3% in September 2019," she informed the Lok Sabha.
4. PMI manufacturing index: The finance minister said that the index increased from 51.2 in November 2019 to December 52.7 in December 2019 and 55.3 in January 2020.
5. Forex reserves: FM Sitharaman said that the forex reserves have built up from $413 billion by end of March 2019 to $466.69 billion as of January 24, 2020. This she said was reflective of the increasing confidence of overseas investors in the Indian economy.
6. GST revenue collection: She further stated that the gross GST collection was steadily improving. The gross GST revenue collected for the month of January 2020 stood at Rs 1,10,828 crore. The finance minister further stated that during April 2019 and January 2020, the gross GST collection has surpassed one lakh crore six times pointing towards an increased economic activity. The gross GST revenue collected in the month of January 2020 grew at 12% as compared to the corresponding month in the previous year (FY19).
7. Secondary markets: The finance minister said that "reinstating the positive confidence in the Indian economy, the secondary markets continued to be upbeat." She informed the house that "the BSE Sensex increased by 5.6% upto January 31, 2019, over the end of March 2019."