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Indian economy limping back to normalcy? There's proof, says govt

Dipak Mondal     June 23, 2020

KEY HIGHLIGHTS:

  • India's PMI Manufacturing and Services showed lower contraction in May at 30.8 and 12.6 respectively
  • Electricity consumption saw lower deceleration in May and June at -15.2% and -12.5%, respectively
  • Value of goods transported showed a 130% growth at Rs 8.98 lakh crore in May
  • Till June 19 value of goods transported stood at Rs 7.7 lakh crore
  • Consumption of petroleum products increased 47% in May
  • Procurement of wheat by govt agencies touched an all-time record figure of 382 lakh metric tonnes on June 16
  • Till June 19 farmers sowed 39% higher Kharif crops than corresponding period last year

Is India limping back to normalcy as the lockdown is  rolled back across the country? The government on Tuesday came up with many numbers and indicators to prove that economic activities in the country are picking up in a decent pace.

A release by the government says early green shoots of economic revival have 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 a pick up.

According to the government, India's PMI Manufacturing and Services showed lower contraction in May at 30.8 and 12.6 respectively compared to 27.4 and 5.4 respectively in April. Electricity consumption also saw lower deceleration in May and June (till 21st) at -15.2% and -12.5%, respectively, compared to -24% contraction in April.

Movement of goods also picked up as is evident from the massive growth total assessable value of e-way bills. Value of goods transported (as assessed through e-way bills) showed a 130% growth at Rs 8.98 lakh crore in May 2020 compared to Rs 3.9 lakh crore in April. However, this is still lower than last year May. In June till 19th , value of goods transported stood at Rs 7.7 lakh crore.

E-way bills are issued by the company transporting goods or at times transporters as well giving full details of goods being transported, the place of transportation, etc. E-ways bills are mandatory under the new GST law for any transportation of goods worth more than Rs 50,000.

Average daily electronic toll collections have also shown a significant jump in May and June as they increased from Rs 8.25 crore in April to Rs 36.84 crore in May and Rs 49.8 crore in the first three weeks of June. Railway freight traffic improved by 26 per cent to 8.26 crore tonnes in May against 6.54 crore tonnes in April.

Digital Retail financial transactions via NPCI platforms also witnessed a sharp jump from Rs 6.71 lakh crore in April to Rs 9.65 lakh crore in May.

Another indicator that the government has cited to prove that economic activities are slowly coming back to normalcy is the consumption of petroleum products.

The consumption of petroleum products 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. The 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.

Agriculture sector also showed increased activities with procurement of wheat from farmers by government agencies touching an all-time record figure of 382 Lakh Metric Tonnes (LMT) on 16th June, 2020 surpassing the earlier record of 381.48 LMT achieved during 2012-13.

As on 19th June, farmers have sown 13.13 million hectares of Kharif crops, 39% higher than corresponding period of last year with a big jump in area coverage under Oil seeds, Course Cereals, Pulses and Cotton. Fertiliser sales have increased 98% year-on-year in May 2020 to 40.02 lakh tonne.

Also read: Banks sanction over Rs 75,400 crore of loans to MSMEs under credit guarantee scheme

Also read: MSMEs crisis: New Rs 1 crore payments default threshold for bankruptcy backfires


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