1. India’s PMI Number Resorts To Manufacturing Its Own Health
India’s manufacturing activity expanded for the 1st time in the last 5 months in August 2020, showing green shoots of economic revival. The manufacturing PMI came in at 52 in August, compared to 46 in July. Amongst the 16 countries that reported a revival in their PMI numbers, India’s was the highest!
As Covid 19 continues to press pain, Indian industries look to manufacturing a pain suppressant. After 5 months of toil, manufacturing finally leaps into expansionary mode, with business confidence following suit. Next month and after may tell a different story, but as open 4.0 happens, Manufacturing Sector is gearing up for opening 5.0.
2. Winter Is Coming…With Stronger GDP Growth Aspects!
Economic Advisory To The Prime Minister (EACPM) has estimated that India is too see sprouts-&-bouts of economic growth in the 2nd half of this calendar year. As India looks to becoming the world’s manufacturing hub, smarter subsidies can welcome an era of growth like one observed during 1991 forex crisis.
India’s economy has adorned the qualities of a phoenix, as it gears up to rise from the ashes. India’s potential and promises are just as alive as they were before the virus hit, albeit with a few hiccups! Think of it as a race, in which India tripped cause of untied shoelaces. But the laces are tied now, and the finishing line is coming in sight. Its all Go from here!
3. A Depressed GST Mop-up to Mop States Woes
GST collection in August stood at Rs. 86,449, adorning a 12% fall on YoY basis. Q1FY21 GDP collections is only 59% of GST collected in the same quarter last year. However, collections did improve 70% in April-July 2020 compared with same period last year.
Covid has broken the long-standing economic shackles, in its attempt to closing the economy down for nearly 75% of this calendar year. As GST collections stand as true reflections of the same, the rate of adopting to the new normal will be key in boosting GST to pre-covid levels. Opening 4.0 Is sure to welcome better times, as proof lies in correction from April’s abysmal GST collection, which nosedived 72% to record low levels.
4. Supreme Court Calling – Telcos Pick-up The Phone To Battle Another 10 years!
The Supreme Court allowed telecom companies to clear their AGR dues in 10 years, ending an extended industry-versus-government dispute on the matter. Telecom operators will have to make a 10% upfront payment by March 31, 2021 and can’t default on the annual payments.
Finally, a celebratory news in 2020! In Non-Covid news (yes, that’s still a thing), Telecom operators have new life breadth into them in extending payments. Think of their loan moratorium being extended for another decade, albeit with some conditions. And the big boys deserve it, for their stiff competition has India boasting the cheapest data rates in the world!
5. Covid 19 – The Virus Which Shrunk The Economy But Widened Debts
Government debt is set to record its highest data since such recording was initiated back in 1980, at 91%. The constant capital outlays have increased govt. debt since FY16, but still stood at 75% in FY20. Debt-ratio is likely to stay above 90% till FY23, and only touch target levels of 40% by FY40.
Covid 19 has the country’s accounts all out of balance. The country is racking up debt at startling rates to refurbish the current broken economy. However, form troughs come peaks, although the journey uphill is 1 tough battle. As we chant Buzz lightyear’s golden words of “Onwards and Upwards”, we must remember the merit debt financing brings! So, if the cards play out right, the current debt overhang can be a long-term blessing in disguise
