The Signal: The Week & More

1. Job opportunities opening with relaxed lockdown restrictions

Easing of restrictions on economic activity coupled with increasing focus on ramping up operations and sales by businesses is having a positive impact on hiring of freshers. The team lease Employment Outlook report for the July-September quarter noted that the intent to hire freshers has increased by 7 per cent in the current quarter

Leading indicators have all signaled towards revival of growth in the country, GST collections, E-way bills, electricity demand, fuel consumption have all seen steady growth in the past month. Opening up of job opportunities bodes well for the country when the unemployment rate in the country is higher than what it used to be in the pre pandemic stages.

2. Forex reserves jump to all time high in the country

The country’s foreign exchange reserves rose by USD 835 million to touch a record high of USD 612.73 billion in the week ended July 16, 2021. In the previous week ended July 9, 2021, the reserves had surged by USD 1.883 billion to USD 611.895 billion.

India now has the fourth highest forex reserve kitty in the world. The Increase in Forex Reserves provide comfort to the government as the current reserves are enough to provide for a year of import bills. The rise in reserves can also aid rupee appreciation against the US Dollar.

3. MSME’s back on the revival track

MSME segment’s credit demand has seen a sharp surge post unlock exercise. In March 2021, commercial credit enquiries were at 32 per cent over pre-Covid-19 levels.

The Governments ECLGS scheme has been successful in increasing the MSME Credit off take in the country. The country has seen a 40% YoY growth in disbursements, thereby reviving business sentiments. A gush of liquidity within the banking sector is finally reaching out to the bottom of the pyramid.

4. India ranks higher on the trade facilitation score

India has scored 90.32 per cent in the global survey on Digital and Sustainable Trade Facilitation. This is a remarkable jump from 78.49 per cent in 2019. India has seen improvement in all the five key indicators: transparency, formalities, institutional arrangement and cooperation, paperless trade and cross-border paperless trade.

The Central Board of indirect taxes and customs has been at the forefront of path breaking reforms in all the five spheres. A higher score for the country also helps foreign countries in their investment decisions. It also sets out measures for effective cooperation between customs and other authorities on trade facilitation and customs compliance.

5. India expected to see 7% growth next fiscal

According to the CEA, India is expected to hit a growth rate of 6.5-7 per cent in 2022-23 and accelerate further to 8 per cent in the subsequent years on the back of reforms undertaken by the government. He also said the government is expected to meet the fiscal deficit target of 6.8 per cent in the current fiscal despite pressure on revenue collections.

India on the growth revival track may only face further hurdles if a third wave of covid brings about another lockdown. Mass vaccination will be the key against that. Supply-side reforms undertaken by the government in sectors such as agriculture, labor, export PLI scheme, change in MSME definition, creation of the bad bank and privatization of public sector banks will drive growth in the future.