The Signal: The Week & More

1. Services In Contraction

India Services PMI recorded 41.2 in June vs 46.4 in the month prior, touching its lowest levels since August 2020. Contracting for the second straight month, key worries were seen in new inflows and old outputs. Both contracting at their fastest rates since July 2020. As is seen globally, manufacturing PMI continues to out-perform its services counterpart, courtesy of the latter being hit harder by Covid-19.

The latest reading points to a solid rate of reduction, albeit slower than that seen in aftermath of first COVID-19 wave. Key worries are seen in new inflows and old outputs, as both contracted at fastest rates since July 2020. Tensions have marred overall outlook as positive sentiment slipped to ten-month low, supported with seventh convective month of jobs shedding, with current cut being fastest over study period.

2. Mutual Fund Industry Monthly Update

MF AUM settled at record ₹34.10 Trillion As On June 2021. SIP collections increased for the third consecutive month, crossing the ₹9,000 Cr mark for the first time this financial year and second time this calendar year. June saw inflows Of ₹15,320 Cr vs outflows of ~38,600 Cr in the month prior. Industry AUM rose by 1.9% due to frenetic markets and a gush of NFO launches. Equity AUM increased by 3.9% To ₹11.10 Lakh Crs and Debt AUM increased marginally by 0.5% to ₹13.86 Lakh Crs.

The ratio of fresh SIP registrations to the closure of old SIPs saw a sharp rise in June, with a large number of new SIPs being registered. Investors have become cautious and are taking the SIP route rather than investing lump sums at this stage, considering the market rally that has happened. A lot of new investors have also come into mutual funds and they are testing the waters with small SIPs.

3. Economic Recovery Tide Nears Hitting The Indian Shore

India will be a more dynamic and friendlier business destination and it will be part of more reliable and resilient supply chains that the post-Covid world requires. Indo-Pacific will be an arena of particular “activity and energy”, as the evolving situation in the region reflects the reality of globalisation, emergence of multipolarity and the benefits of rebalancing.

Government to boost growth in areas of agriculture, infrastructure, manufacturing and tourism, using framework that envisages deeper strengths, greater capacities and more responsibility. Indo-Pacific reflects the reality of globalization, the emergence of multi-polarity and the benefits of rebalancing. It means the overcoming of the Cold War and a rejection of bipolarity and dominance.

4. Hiring Emerges Out Of Hibernation

India’s hiring rate has recovered moderately from 10 per cent in April to 35 per cent in May 2021, but the aftermath of the second COVID-19 wave has left professionals in India increasingly vulnerable to the economic uncertainty. Some of the dominant industries that are actively hiring are — Finance, Corporate Services, Manufacturing, Healthcare, and Hardware & Networking.

As this dynamic hustle for upskilling, tech-proofing, and recruiting continues, India’s workforce has slowly but surely arrived at the brink of collective burnout. This sentiment reflects strongly across the rising demand for flexibility in India as every second job seeker prioritises location, hours, and work life balance when looking for a job today.

5. GST Has A Great Fall

June GST mop-up at 10-month low on curbs after topping the Rs 1-lakh-crore mark for eight months. It fared better than expectations showing the muted impact of second wave of the pandemic on GST revenues even as e-way bill generation had shown a sharp dip to one-year low levels in May.

Most of the states/UTs were under either complete or partial lockdown due to COVID, negatively impacting GST collections. Knowing the collections numbers come on the back of reduced transactions, these numbers also reflect the economic resilience shown during the recent pandemic phase.